We show how the design of pension and life insurance products, and their administration, reserve calculations, and audit, can be based on a common formal notation.

This notation is human-readable and machine-processable, and specialized to the actuarial domain, achieving great expressive power combined with ease of use and safety.  In essence, this is a specialized actuarial programming language.  The language comprises (a) product definitions based on standard actuarial models, including arbitrary continuous-time Markov and semi-Markov models with cyclic transitions; (b) calculation descriptions for reserves and other quantities of interest, based on differential equations; and (c) administration rules.

Each such description serves multiple purposes, thus ensuring consistency between all the operations of the insurance company: distributing incoming payments across coverages, generating annual statements for customers, paying benefits to pensioners, calculating reserves, producing reports for accounting and tax purposes, and so forth.  Reserves are calculated by high-performance numerical differential equation solvers.

Because of the specialized nature of the language and its direct basis in actuarial theory, we can provide automated tools for early detection of errors and inconsistencies in the design of an insurance product.  Moreover, even though the notation reflects a high-level actuarial view of products and reserve calculations, the calculations can be automatically optimized to be very fast.  The short distance from actuarial thought to efficient computation enables much faster and less expensive development of new pension products.

In this paper, we demonstrate how to describe products and common analyses such as computing reserves and equivalence premiums, while avoiding the intricate and opaque program code typically found in IT systems for insurance and pension administration.  Actuaries can use the language and system for rapid experiments with new product designs, and subsequent administration can build on the exact same product descriptions.