Best analytics solution: Functional Finances, ownR
Programming tools R and Python have become increasingly popular among insurance companies for modelling and analytics, as the languages are widely taught to actuarial students and there are a host of open-source solutions to common problems.
While ideal for a solo data scientist, they are however not suited to collaborative development and the robust production environments that insurers desire.
Functional Finances developed its analytics platform, ownR, to tackle the most common problems when working with R and Python as a team in an enterprise environment.
"We wanted to professionalise the use of the tools within an IT-supported, server-based and controlled environment – and create a comfortable workflow for model development, sharing solutions and managing applications through a private repository," explains David Kun, co-founder of Functional Finances alongside Gergely Márk.
The ownR platform allows users to reproduce calculations, no matter how much later the code is run, avoiding the problems that arise when dependent packages get updated, environments change, and the same input data with the same code produces different results than last time.
Another feature is its ability to integrate R and Python with third-party software so that non-technical users can "run" the code, as many times as they might wish, without having to go near the programming language. The platform can also integrate with other tools and packages, including actuarial modelling systems.
"We make it possible for teams to benefit from a single common platform - and their end-users to use a common API without knowing if a specific model is written in Python or in R," Kun explains.
One of Functional Finances' deployments of ownR is at Dutch insurer Delta Lloyd (now part of NN) where it is used to perform daily calculations of the Solvency II volatility adjustment.
The tool is also used for scenario analysis, where the process of pulling in data is automated, and non-technical users can play with the inputs and perform runs without bothering the actuarial or IT departments.
Functional Finances is also working with banks and some firms outside financial services, in the pharmaceutical and construction industries.
"With the ownR platform R and Python are no longer the pariah of the IT landscape. Instead, they take their well-deserved place as production languages, with the quants, actuaries and data scientists finally seen as developers of business-value solutions," says Kun.