39. Monitoring TODO Flashcards
1
Q
Source of surplus=> belong to any member?
A
- Preserving industrial relations with members and other employees
- Speed of corrective action=> Distribution of surplus slower than amortizing a deficit
- Chapter 39- Monitoring
2
Q
Why is experience monitored?
A
- Update method and assumptions=> reflect expected future experience more accurately
- Monitor trends in experience=> corrective action taken
- Information to management and key stakeholders
- Key part of ACC
3
Q
What is the broad requirement for monitoring?
A
- Reasonable volume of stable consistent data=> future experience and trends
- Data÷ Homogeneous risk groups
- Sufficient quantity maintain credible analysis
- Assessing decrements=> info on both:
- Exposed to risk
- Risk event
- CONSISTENCY
4
Q
How should demographic factors such as mortality be monitored?
A
- Each age band- ð‘‘ð‘¥
- ð‘™ð‘¥
- Compare with existing assumptions- std table
- Compare with relevant std tables for better assumptions to fit data.
5
Q
How should economic factors such as investment returns and interest rates be monitored?
A
- Compare actual vs assumed
6
Q
Why should results of monitoring not be utilised blindly?
A
- Period under investigation not typical=> Unrepresentative results • Experience under investigation affected by: o Abnormal events
- Significant random fluctuations
- Economic cycles o Trends in experience
- Heterogeneity in the data used and the groups to which it will apply
7
Q
How to deal with the above abnormities?
A
- Adjust the data for the factors
- Create margins in the assumptions o Allow for data and modelling risk
