In the world of actuarial and financial modelling, excel spreadsheets still appear to be king. I think this is probably due, in large, to fact that us actuaries, quants and economists building the models desperately feel a need to be able to own the model, and to change it as we go. We prize the ease of change and flexibility of the spreadsheet far more than the assurance of having no errors. There have been a few stories in the press emerging recently about how the use of spreadsheet models have had, as our software engineers refer to them, “undiscovered and undesirable features”. More
A client recently asked our opinion on how to spread validation over the draft SCR and final SCR submissions. There aren’t definitive answers to be found saying exactly what to do, but there are several considerations we think you should take into account when looking at this.
Materiality is probably the biggest factor to consider in your decision-making. Make sure you carry out as much validation as possible on the material risk classes and material risk groups for the final run of the model. You can probably do the lower materiality risk groups or risk classes on the draft. More