The cost of insuring the world's population has been calculated at approximately $190 trillion, or roughly 2.5 times world GDP,1 according to Willis Towers Watson. The calculation, run on the Microsoft Azure cloud platform, involved an analysis of the insurance cost of providing each of the world's 7.3 billion people with a $100,000 whole life insurance policy and took under two hours.
"This was a fascinating exercise to test cloud computing and software technology to the limit and push the calculation boundaries for insurers," said Stephen Hollands, software-as-a-service and vGrid global product lead, Willis Towers Watson. "It demonstrates how industrialized risk modeling has become and how much processing power, speed and accuracy insurers have at their fingertips to price their products and manage risk and capital."
Willis Towers Watson, using Microsoft Azure Batch cloud service, ran the specialized insurance calculation with over 100,000 processing cores in approximately 90 minutes. According to the company, the calculation would have taken 19 years on a stand-alone computer with a single core. The entire exercise — including a one-off setup and configuration of the customized grid and model, in addition to running the model several times — took less than 24 hours and used data centers around the world, including Australia, Brazil, Europe, India, and Japan.
"What question is bigger for a life insurance company than figuring out the cost of insuring the entire world's population? Answering this complex question, in less than 24 hours, is a genuine technological triumph," said Jonathan Silverman, insurance industry solutions director at Microsoft Corp. "In addition, the use of just a single programming interface on Microsoft Azure to do it, regardless of the number of cores involved, shows how easy it has become to achieve a level of scalability that was until now possible only through complex coding and intense management input."
The calculation used RiskAgility FM, Willis Towers Watson's latest financial modeling tool, which is designed to run complex financial models and hyperscale-sized jobs for life insurers. It also used the company's new vGrid product, an infrastructure-as-a-service software tool that allows life insurers to run their models via an on-demand, cloud-based technology grid.
1. With a standard deviation of roughly 15% of world GDP