On the Efficient Dynamical Financial Analysis Computation Supported by UML(VR)

On the Efficient Dynamical Financial Analysis Computation Supported by UML(VR)

Leszek Kotulski (AGH University of Science and Technology, Poland), Marcin Tusiewicz (AGH University of Science and Technology, Poland) and Dariusz Dymek (Cracow University of Economics, Poland)
DOI: 10.4018/978-1-61520-629-2.ch011
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Dynamic Financial Analysis (DFA) is disciplines of actuarial science developed to asses and manage risk. The structure of the problem, simulations-based approach as well as great user demands issue a challenge in terms of defining and controlling a computer software system. In order to properly support an efficient software and data allocation onto a distributed hardware environment we have to specify their basic characteristics. In this chapter we suggest using UML notation extended with vertical relations joining the information represented by different kinds of UML diagrams. Next this information is transformed into a graph notation that supports the optimal allocation of a new DFA process with the polynomial computational complexity. This way we are able to optimize DFA calculations on a given hardware environment without any changes to the software system.
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For a long time–up until the late 1990s–the insurance business used to be an area characterized by little strategic flexibility and innovation. Regulations heavily constrained the types of insurance and the products were relatively simple, addressing only specific types of risk. Therefore there was no need for sophisticated analysis, and those practiced covered isolated cases only without taking a global view.

However the regulations were loosened and gave more flexibility to the insurers, leading to new types of much more complicated products. The competition on the market also increased. The risk factors became more complicated and had to include social, demographic and political changes. Additionally the shareholders put more pressure on the returns. A detailed overview of these developments can be found in (Briys & de Varenne, 2001). As a result the insurers must consider all aspects that have influence on the solvency of a company, not only single isolated cases. The new discipline in finance was named Enterprise Risk Management (Crouhy, Galai, & Mark, 2001).

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