My Actuarial Working Life

In my previous post, I have discussed areas that you may consider in setting up input variables . Before I proceed my discussion on core variables, I would think that it is good for use to take a look on indicators - as indicators play an important role in setting core variables with various formulas (known as "variable definitions" in a Prophet model).  The funny thing about indicators is: it DOES NOT carry any formulas that you need to use in calculating a variable! Basically, they are just some texts that you can combine using different logical operators (AND, OR, NOT), such as "ORD_PAR AND SING_PREM" for a single premium ordinary participating product. 

If you a Prophet user, you must have heard about input variables  and core variables . In simple words, input variables that you need to define individually when you setup a product (of course you can accept the default definitions), whereas core variables are those will be automatically called from libraries when you perform a run.  However, do you ever think how we should assign a variable as input variable or core variable? What are the characteristics that make a variable to be better assigned as input variable? There is no a single right or wrong answer for the above questions. In this article, I am going to share my views (actually the treatment I adopted in the Prophet models I developed before) on how you can handle input variables in the Prophet models.