We need to specify the model, design it, and decide what implementation language(s) to use.

Designing the model

We are currently envisaging a modular architecture, with good APIs, so that other people can write modules that slot right in.

The overall framework will be MVC (Model-View-Controller).

We're not going to have a whizzy front end. Model configuration and parameter information will be read in from XML files. Model results will be output to text files, suitable for importing into a spreadsheet or R. This means that we pretty much do without the View bit of MVC.

Implementation languages

The basic framework will be in Java. We'll call to R and C++ as appropriate for specialist stuff.

Implementation stages

We'll start off by implementing just about the simplest possible prototype, and gradually elaborating on it. See also the list of StuffToDo, which gives some idea of the modelling functionality that we want to have and how important it is.

Prototype 1

The first prototype will have the following functionality:

Modelling functionality

• Single line of business
• Earned premium basis only
• No inflation on exposure units
• Expenses as a % of premium
• Expenses as a fixed amount per exposure unit, inflating
• Cash assets only
• A single interest rate, used for both cash returns and inflation
• Deterministic interest rate
• Variable loss amount per unit of exposure
• Fixed payment pattern for claims
• Reserve equal to unpaid claims (no reserving error)
• No reinsurance
• No business logic
• No tax

Framework

• Fixed configuration (ie, not read in from configuration/parameter files)
• Java only; no interface to other languages
• Output files will be produced
• Overall framework will be designed and documented

Process and documentation

• Development requirements (ie, installing Java etc) will be specified
• Build scripts will be developed
• User documentation (for executing and modifying) will be produced
• CVS repository will be set up on Sourceforge
• Standards for coding and documentation will be produced

Prototype 2

The second prototype will add in:

Modelling functionality

• Simple tax
• Simple reinsurance

Framework

• Configure from configuration file
• Interface to R (or Gnu Scientific Library)