October 2013

Reminiscences of a Prophet Operator

By Anton Kobelev

I have worked with Sungard’s Prophet software for the past three years. Upon finding out that I would be working at a company where Prophet is used, I immediately hit the Web to try to find out as much as I could about it and perhaps take a few free tutorials, which I was confident existed out there. Aside from several references and testimonials on the Actuarial Outpost site and the sales pitch on SunGard’s website, there was nothing. No screenshots, no tutorials, no walkthroughs.

This article is an attempt to show entry-level actuarial students what this beast really is. Unfortunately, I was not able to obtain permission from SunGard to publish screenshots, but I hope that I can walk you through the program interface and features without it.

I only got to work on Prophet Professional. I hear there is also Prophet Enterprise, but I never got around to working on it.

Prophet is a projection system and can be compared to an Excel spreadsheet on steroids, where each column represents a variable which is projected over time. It is more efficient than Excel of course, but the essence is the same. Prophet is able to project the variables, discount them and calculate various actuarial and financial figures in a single run. There is a fairly easy initial learning curve to using Prophet—once you get to know the steps to run the program, there really isn’t much more to it.

My Prophet Professional setup also included a program called DCS. DCS is a data manipulation program that converts and summarizes your text or Access policy information into a set of asset and/or liability model point files. Model point files are what Prophet Professional uses as input.

To run Prophet you need the following components:

  • Model point files—the asset and/or liability data, which is then used in Prophet calculations and projections;
  • Assumption tables—these are a set of tables (think of tabs within one Excel spreadsheet), where you specify all of your economic, demographic and experience-based assumptions;
  • Batch files—if you need to do any simple file manipulation between the runs you can create a plain-vanilla Windows *.bat file to take care of the job; and
  • Run settings—a dialog box within Prophet that specifies what, starting from when and how to perform the run.

Now that you have, hypothetically, finished a trial run, there are a few things you can do:

Extract The Data
You can extract the data into Excel using a plug-in. You can extract a summary of point-in-time variables (e.g., reserves) or a series of cashflows across a time period. You can also use built-in extraction tools within Prophet to create a series of standard reports (e.g., statutory reserves and solvency margin) or do an ad-hoc report for a quick check.

Check The Code
Prophet comes with a fantastic feature to check the code, called the Diagram View. You can backtrack on any variable visually and audit your figures and your code in one place without having to do a variable-by-variable extraction into Excel.

Code A New Product
I think of Prophet as a Lego set—it is a collection of code snippets, organized into libraries. For example, there is a U.S. library that includes most of the product and reporting features that are popular in the United States. There is also a Unit Linked library that contains the code for the Unit Linked products. Depending on where you are and the products you have, you assemble these code snippets into your projection model using indicators, core variables, secondary variables, etc.

Customize The Model
It is easy to customize models, alter code, add product features, or create new products. However, one downside is that you have to be responsible for maintaining proper controls and model change documentation, as these model changes can easily be lost in the code.

There will be a time when you have made so many modifications to your model that it has become slow to run and painful to audit. Short of hiring consultants to come in and fine-tune your model, you can try to optimize it yourself. Prophet includes diagnostic features that you can use to see which part of your model is the slowest or you can learn these tools in the Advanced Coding class, offered by SunGard.

Learn More About Prophet
SunGard provides training courses which you can attend mostly across Europe. I am not aware of these courses being held in the United States, since Prophet is more popular in Europe after all. However, there are SunGard offices across the United States as well. A few months ago, Sungard assured me that they were working on interactive on-demand Web training videos, but there was no such option available at the time of writing.

In-person courses are held for small groups of students and are very hands-on. You can also arrange for a private training of your staff at your company.

Even though it is fairly easy to start working on Prophet once someone shows you the ropes, it is not so easy to become more advanced in it. Complex features like extended formulas, array variables, dynamic loops and others really require some serious training. SunGard can help you in these situations, but unfortunately you will have to arrange for a training course, since their documentation is not as good as one would have wanted.

How Can You Prepare?
If the above has gotten you excited about working with Prophet, and you would like to prepare yourself as much as you can for this adventure, there ARE a few things you can do to get a head start. Prophet uses what seems to be simple C++ as its syntax, so learning the basics of this language would not hurt. You would not need anything more complex than the basic set of functions.

Excel extraction spreadsheets use Visual Basic for Applications, so if you want to modify existing spreadsheets or design custom ones for your reporting purposes, VBA for Excel is an essential toolset to have.

And finally, batch file programming may be used in rare occasions, so go ahead and spend half an hour learning that!

To summarize, Prophet Professional, as described in this article, is a mere drop in the Prophet universe. Prophet can be expanded to run stochastic calculations, use multiple computers as slaves, produce experience studies, mine the big data and much more. However, if you are just starting out with running and coding Prophet, it is likely the content in this article is enough for you.

Anton Kobelev is the founder of www.actuarialstartup.com. He can be reached at anton.kobelev@gmail.com.