Someone sent me a presentation today, which included a rather complicated diagram. It shows the flow of data and results between the various teams in the company. There’s the Actuarial team, who produce the results, the Capital Management team, who work on the solvency calculations, and the Tax teams, who calculate tax numbers for the group. And about 10 other teams as well. In between all of these data flows were two models. One is the LDM, which is rather complicated, and I won’t go into here. But the other is probably the most sought-after model in all of history. It has a role in this diagram due to its ability to process Financial numbers for Management Information. But it’s chief purpose is to Make Everyone Happy. You’d think that this is superfluous in a company full of accountants and actuaries, where they all get to play with as many numbers as they like (and sometimes more!). But occasionally, the Review Actuary will get a little bit sad that his fund is slightly less solvent this year than last. The Fund accountant will be a bit upset at the increase in the tax due.
And that’s when they bring out the Happy Model. Open it up, click on “Make it all just go away”, and the impact is immediate. The cares are lifted from the shoulders, the smiles return, and the Sigh of Satisfaction reverberates down the long, dark, corridors.
The Happy Model, as used by Accountants
