pathwise

PathWise Uses Amazon EC2 to Model Customer Data Hundreds of Times Faster Than Legacy Solutions

2020

All it takes is one big financial mistake to put a business in peril. That’s why many of North America’s largest life insurance companies rely on PathWise®, a high performance computing (HPC) enterprise risk-management solution from professional services firm Aon. PathWise allows (re)insurers and pension funds to access next-generation technology to rapidly solve today’s key insurance challenges. It is a single enterprise solution for financial and regulatory reporting, dynamic and macro hedging programs, economic scenario generation, new product development and pricing, and business planning forecasting for budgeting and planning.

Companies use PathWise enterprise hedging solutions to protect tens of millions of individuals’ retirement savings through its dynamic and macro hedging solutions. Because its system uses real-time capital markets information and performs real-time calculations on both assets and liabilities jointly without any shortcuts, clients are in a better position to view, understand, and manage their risk. The platform has long relied on cloud compute capacity from Amazon Web Services (AWS), and a recent move to Amazon Elastic Compute Cloud (Amazon EC2) P3 Instances powered by NVIDIA V100 Tensor Core GPUs positioned PathWise to be even faster, more accurate, and more reliable.

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PathWise’s risk-management solution rapidly solves key insurance challenges for our worldwide customers in an evolving market by using Amazon EC2 P-series instances.”

Peter Phillips
President and CEO, PathWise

The Journey to Speed

Initially operating with an on-premises system, PathWise moved to an AWS Cloud solution in 2011, and it hasn’t looked back. “The cloud was a move in the right direction,” says Peter Phillips, president and CEO of PathWise. “It provides the scalability, integration, and cost savings our clients demand.”

AWS’s vast and varied computing infrastructure helped PathWise deliver for clients, easily aligning to changing technologies and PathWise’s changing needs. “There is a lot of flexibility,” says Phillips. “Migrating to newer technology is easier to do with AWS.” PathWise initially ran Amazon EC2 G2 Instances, which are intended for graphics and general-purpose GPU compute applications. As the software’s workload grew, it moved to Amazon EC2 P2 Instances—powerful, scalable instances that provide GPU-based parallel compute capabilities for server-side workloads requiring massive parallel floating-point processing power.

“One of the main benefits of PathWise is its speed,” says Phillips. “And we have that speed because we’re able to make use of the many cores on GPUs.” Major insurance companies have millions of policies, as well as financial shocks and thousands of market scenarios to consider when running models on PathWise. The GPUs provided by AWS instances enable PathWise to run these immense calculations in parallel, completing calculations in seconds or minutes that can take days or weeks in legacy systems.

Leveling Up to the Next Generation

But the innovation didn’t end there. When AWS released Amazon EC2 P3 Instances powered by NVIDIA V100 Tensor Core GPUs, which deliver up to one petaflop of mixed-precision performance per instance to significantly accelerate machine learning and high-performance computing applications, PathWise began moving its workloads once again to take advantage of the new generation of GPUs. The move gave PathWise’s customers a noticeable sixfold speed improvement. Now PathWise offers the fastest modeling speeds per unit cost in the industry today, at 300–10,000 times faster than legacy solutions.

This increased speed and capacity were crucial for end users who use PathWise’s grid monitoring console application to track their jobs. “Using these GPUs, they’re able to update their hedging calculations as fast as they want—every 5 minutes, for example,” says Phillips. “All the calculations get run on the grid while markets are open.”

PathWise and its users also benefit from the 99.999 percent uptime provided by AWS. “Part of the reliability of PathWise relies on this uptime from AWS,” says Phillips, as does having the flexibility to scale computing resources up or down to match customer demand. PathWise clients have control and line of sight into the cost of adding more users, compute power, and storage, all backed by service-level agreements. So, as their business conditions change, companies can adjust quickly and enjoy the benefit of new and better technology as it arrives in the marketplace rather than order it themselves, set it up, and manage it.

And while speed and performance are PathWise’s primary objectives, security is equally important. The company must comply with SOC 2 audits and penetration testing to ensure its data is securely managed in the interest of both the company and its clients. To run models through PathWise software, customers are necessarily sharing sensitive data that must be protected. The company’s compliance is dependent on the security of its virtual private cloud environments in AWS. “Clients feel safe with AWS, as it’s secure and robust,” says Phillips, while noting that AWS boosts PathWise’s excellent reputation for security from being a fully transparent business solution when it comes to internal audits. “Our systems that run in AWS undergo annual SOC 2 Type 2 audit,” says Phillips. Thus, customers see layers of security protection and awareness when running information through PathWise.

Performance in a Time of Extreme Volatility

In an industry where speed matters even under normal circumstances, emergency scenarios highlight why high performance is especially crucial to PathWise and its customers. When natural disasters and other emergencies strike—such as the COVID-19 pandemic, which halted much of the world’s workforce and caused extreme market volatility in 2020—PathWise is a steadfast support for customers. As a cloud-based modeling enterprise software solution versus an on-premises software solution, PathWise is designed to deliver high performance in volatile situations.

Customers are “looking to calculate their risk exposure when the market moves suddenly,” says Phillips. “It becomes extra critical for our clients, who are hedging their products in PathWise, to be able to do real-time analysis.” Thanks in part to the speed and performance of Amazon EC2 P3 Instances, the PathWise software can incorporate updated market data into customers’ models, showing the next market exposures in real time without approximations, allowing its insurance customers to make informed decisions quickly and move forward confidently when managing their risk. “PathWise’s risk-management solution rapidly solves key insurance challenges for our worldwide customers in an evolving market by using Amazon EC2 P-series instances,” says Phillips.

Looking to the Future

With years of successful innovation behind it, PathWise has a culture that drives its continued improvement, both for existing customers and for its expanding customer base. “We are continually upgrading our clients to the latest technology,” says Phillips. “We’re also developing AI and ML solutions in PathWise to run in AWS.”

PathWise has spent more than a decade pursuing its mission to provide a complete enterprise risk solution for its customers, and integrating AWS tools is enabling it to do so more effectively. “AWS provides infrastructure that can grow, expand, or decrease in line with our clients’ requirements, with clear line of sight into the costs,” says Phillips. “It can do so on demand for customers even during off-market hours and on weekends. Some of the biggest life insurance companies in the world trust PathWise for accurate and up-to-date analysis, and PathWise trusts AWS to deliver reliable, secure compute capacity at speeds that keep up with demand.”

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About Pathwise

A leader in quality systems solutions, Aon’s PathWise is a cloud-based software-as-a-service application suite geared toward enterprise risk-management modeling that delivers speed, reliability, security, and on-demand service to an array of customers.

Benefits of AWS

• Delivers fastest modeling speeds per unit cost in the industry today: 300–10,000x faster than legacy solutions
• Provides hedging platform risk exposure updates every 5 minutes
• Enables 99.999% uptime


AWS Services Used

Amazon EC2 P2 Instances

Amazon EC2 P2 Instances are powerful, scalable instances that provide GPU-based parallel compute capabilities.

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Amazon EC2 P3 Instances

Amazon EC2 P3 instances deliver high performance compute in the cloud with up to 8 NVIDIA® V100 Tensor Core GPUs and up to 100 Gbps of networking throughput for machine learning and HPC applications.

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