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A311 Actuarial Risk Management (2020) - Contact on Linkedin for access > Acronyms > Flashcards

Acronyms Flashcards

1
Q

Contract Design Stakeholders

A

ALPACAS

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2
Q

Contract Design Factors

A

AMPLE DIRECT FACTORS

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3
Q

Reasons for calculating provisions

A

BAD MEDICS

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4
Q

Considerations when using past data to set future assumptions

A

BEST ARCHER

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5
Q

Characteristics of a prime property

A

CALL ST

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6
Q

Common aims of accounting standards (for benefit scheme disclosures)

A

CARD

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7
Q

Practical problems with overseas investment

A

CATERPILLAR

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8
Q

Main difficulties of overseas investment

A

MTV

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9
Q

Additional reports accompanying accounts

A

CIRCUS

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10
Q

Expenses incurred by product provider

A

COST RAID

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11
Q

External environment factors

A

CREATE GRAND LISTS

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12
Q

Inappropriate advice

A

CRIMES

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13
Q

Benefit scheme info to disclose in accounts

A

DIM CLAIMS

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14
Q

Reasons for analyzing surplus

A

DIVERGENCE

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15
Q

Considerations in assessing different models

A

FENCED

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16
Q

Types of actuarial advice

A

FIR

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17
Q

Evaluation of risk mitigation options

A

FIRM

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18
Q

Importance of risk reporting

A

FRAUD CRIME

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19
Q

Economic situations in which cash is attractive

A

GRID

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20
Q

Aims of a regulator

A

GRIP

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21
Q

Economic factors

A

IS FIERCE

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22
Q

Factors to consider when setting assumptions

A

LUNCH

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23
Q

Additional criteria for an insurable risk

A

MUD PIS

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24
Q

Risk responses

A

PIRATE

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25
Q

Identification of causes of risk in projects

A

PNEFCPB

Preston North End Football Club Plays Brilliantly

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26
Q

General reasons for holding cash

A

POURS

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27
Q

When information from a benefit scheme should be disclosed

A

PRICE

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28
Q

Problems with industry data

A

QUERIED

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29
Q

Why financial providers need capital

A

REG CUSHION

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30
Q

Reasons for using reinsurance

A

SAD LIFE

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31
Q

Reasons for underwriting

A

SAFARI

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32
Q

Benefits of a good risk management system

A

SAMOSAS

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33
Q

Model design: Operational issues

A

SCARCER FILES

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34
Q

Info to disclose to benefit scheme members

A

SCRIBE

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35
Q

Functions of a regulator

A

SERVICE

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36
Q

Ways of valuing assets

A

SHAM FADS

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37
Q

Reasons why disclosure is important

A

SIMMERS

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38
Q

Factors affecting investment strategy

A

SOUNDER TRACTORS

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39
Q

Types of selection

A

STATiC

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40
Q

Investment and risk characteristics of assets

A

SYSTEM T

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41
Q

Regulatory influences on assets held

A

TECH SCAM

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42
Q

Sources of data

A

TRAINERS

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43
Q

Characteristics of investors

A

TRAITOR

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44
Q

Factors to consider for discontinuance terms

A

A POLICY CEASES

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45
Q

Features of good system for monitoring business

A

ACCREDIT DOT

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46
Q

Investment uncertainty

A

AGE ROT

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47
Q

Reserving uncertainty

A

BALANCED FLACCID DAFT CRUMB

48
Q

Sponsor covenant

A

CAB RIDES

49
Q

Analysis of policy experience

A

CALMNESS Q

50
Q

Key risk types

A

CLOG RUM

51
Q

Claims characteristics

A

CRAFT CRAMPS VENDS DRILLS

52
Q

Stakeholders of a general insurance company

A

CRAMPERS

53
Q

Surrender value principles

A

PALACE DICE

54
Q

Assumptions needed for a capital model

A

REDUCE DOG CRITIC

55
Q

Principles underlying the legislation and regulation of institutional investment practices

A

REPEAT CAFE

56
Q

Investment and capital analyses

A

RICE AD

57
Q

Factors affecting data

A

SEMI COMA

58
Q

Adjustments to data

A

TRIM RILLS CRUNCH

59
Q

ALPACAS

A 
Actuaries
Lawyers
Providers of benefits
Accountants
Customer
Administrator
Shareholders / Financial backers
60
Q

AMPLE DIRECT FACTORS

A 
Administration systems
Marketability
Profitability
Level and form of benefits
Early leaver benefits
Discretionary benefits
Interests and needs of customers
Risk appetite of the parties involved
Expenses vs charges
Competition
Terms and conditions of contract
Financing (capital requirements)
Accounting implications
Consistency with other products
Timing of contributions or premiums
Options and guarantees
Regulatory requirements
Subsidies (cross)
61
Q

MAD MEDICS

A

Benefit improvements for a benefit scheme
Accounts and reports (published and internal)
Discontinuance / surrender benefits

Mergers and acquisitions
Excess of assets over liabilities and so whether discretionary benefits can be awarded
Disclosure information for beneficiaries
Investment strategy
Contribution / premium setting
Supervisory solvency reports
62
Q

BEST ARCHER

A

Balance of homogenous groups underlying the data may have changed
Economic situation may have changed
Social conditions may have changed
Trends over time, eg medical, demographic

Abnormal fluctuations
Random fluctuations
Changes in regulation
Heterogeneity within the group to which the assumptions will apply
Errors in data
Recording differences (e.g. in categorization of smoker)

63
Q

CALL ST

A

Comparable properties for rent review
Age, condition and flexibility of use
Location
Lease structure

Size
Tenant quality

64
Q

CARD

A

Consistency in accounting treatment from year to year
Avoiding distortions resulting from contribution fluctuations
Recognising the realistic costs of accruing benefits
Disclosure of appropriate information

65
Q

CATERPILLAR

A 
Custodian needed
Additional admin required
Time delays
Expenses incurred / expertise needed
Regulation poor
Political instability 
Information harder to obtain (and less of it)
Language difficulties
Liquidity problems
Accounting differences
Restrictions on foreign ownership / repatriation problems
66
Q

MTV

A

Mismatching domestic liabilities
Taxation (may not be able to recover withholding taxes paid)
Volatility of currency

67
Q

CIRCUS

A 
Chairperson`s / CEO`s statements
Investment report
Remuneration report
Corporate governance report
Uncertainty (risk) report
Strategic report
68
Q

COST RAID

A

Commission
Overheads
Sales / advertising
Terminal, eg paying benefits

Renewal administration, eg collecting premiums / contributions
Asset management
Initial administration, eg setting up new client records
Design of the contract

69
Q

CREATE GRAND LISTS

A 
Corporate structure
Regulation and legislation
Environmental issues and climate change
Accounting standards
Tax
Economic outlook (eg interest rates, inflation, growth)
Governance
Risk management requirements
Adequacy of capital and solvency
New business environment
Demographic trends
Lifestyle considerations
International practice
State benefits
Technology
Social and cultural trends
70
Q

CRIMES

A

Complicated products
Rubbish (ie incompetent) advisor
Integrity of advisor lacking, eg due to sales-related payments
Model or parameter errors
Errors in data relating to beneficiaries
State-encouraged but inappropriate actions

71
Q

DIM CLAIMS

A

Directors benefit costs
Investment return over year
Membership movements

Change in surplus / deficit over year
Liabilities accruing over year
Assumptions
Increase in past service liabilities
Method
Surplus / deficit
72
Q

DIVERGENCE

A

Divergence of actual vs expected (show financial effect /significance of)
Information to management and for accounts
Variance of whole is equal to the sum of the variances from the individual sources
Experience monitoring to feedback into ACC
Reconcile values for successive years
Group into one-off / recurring sources of surplus
Executive remuneration schemes (data for)
New business strain (show effects of)
Check on valuation assumptions and calculations
Extra check on valuation data and progressiveness of actual vs expected (show financial effect / significance of)

73
Q

FENCED

A 
Fit for purpose
Expertise available in house
Need flexibility
Cost of each option
Expected number of times used
Desired accuracy
74
Q

FIR

A

Factual
Indicative
Recommendation

75
Q

FIRM

A

Feasibility and cost
Impact on frequency / severity / expected value
Resulting secondary risks
Mitigation required in response to secondary risks

76
Q

FRAUD CRIME

A

Financing (appropriate price, reserves, capital requirements)
Rating agencies
Attractiveness to investors
Understand better (risks and their financial impact)
Determine appropriate control systems

Changes over time
Regulator
Interactions
Monitor effectiveness of controls
Emerging risk identification
77
Q

GRID

A

General economic uncertainty
Recession expected
Interest rates expected to rise
Depreciation of domestic currency expected

78
Q

GRIP

A

Give confidence in the system
Reduce financial crime
Inefficiencies in the market corrected (and efficient and orderly markets promoted)
Protect consumers

79
Q

IS FIERCE

A

Inflation
Short-term interest rates

Fiscal deficit
Imports / exports
Employment rate
Returns on alternative investments
Currency
Economic growth
80
Q

LUNCH

A 
Legislation / regulation
Use of the assumptions
Needs of the client
Consistency between assumptions
How financially significant is/are the assumption(s)
`
81
Q

MUD PIS

A

Moral hazard eliminated as far as possible
Ultimate limit on liability undertaken
Data exists with which to price risk

Pooling a large number of similar risks
Independent risk events
Small probability of occurrence

82
Q

PIRATE

A 
Partially transfer
Ignore
Reduce
Accept (retain all)
Transfer
Evade (avoid)
83
Q

PNEFCPB

A 
Political risks
Natural risks
Economic risks
Financial risks
Crime
Project risks
Business risks
84
Q

POURS

A 
Protect monetary values
Opportunities (to take advantage of)
Uncertain liabilities
Recently received cashflow
Short-term liabilities
85
Q

PRICE

A 
Payment commencement
Request
Intervals
Combination
Entry
86
Q

QUERIED

A 
Quantity (credibility)
Up-to-date?
Errors
Relevance (heterogeneity)
Incomplete?
Exceptionals
Detail and format
87
Q

REG CUSHION

A

Regulatory requirement to demonstrate solvency
Expenses of launching a new product / starting a new operation
Guarantees can be offered

Cashflow timing management
Unexpected events cushion, eg adverse experience
Smooth profit
Help demonstrate financial strength
Investment freedom to mismatch in pursuit of higher returns
Opportunities. eg mergers and acquisitions
New business strain financing

88
Q

SAD LIFE

A

Smooth results
Avoid large losses
Diversification (investment mismatchment)

Limit exposure to risk (single event, accumulations)
Increase capacity to accept risk
Financial assistance
Expertise

89
Q

SAFARI

A

Suitable approach (eg increase premiums) and special terms
Avoid anti-selection
Financial underwriting against over-insurance
Actual experience in line with expected
Risk classification (risks rated fairly)
Identify substandard health risks

90
Q

SAMOSAS

A 
Stability / quality of business improved
Avoid surprises
Management of capital improved
Opportunities exploited for profit
Synergies identified
Arbitrage identified
Stakeholders given confidence
91
Q

SCARCER FILES

A 
Simple but retains key features
Clear results
Adequately documented
Range of implementation methods
Communicable workings and outputs
Easy to understand
Refineable & developable
Frequency of cashflows (balance accuracy vs practicality)
Independent verification of outputs
Length of run not too long
Expense not too high
Sensible joint behaviour of variables
92
Q

SCRIBE

A 
Strategy for investment
Contribution obligations
Risks involved
Insolvency entitlement
Benefit entitlements
Expense charges
93
Q

SERVICE

A

Setting sanctions
Enforcing regulations
Reviewing and influencing government policy
Vetting and registering firms and individuals
Investigating breaches
Checking management and conduct of providers
Educating consumers and the public

94
Q

SHAM FADS

A

Smoothed market value
Historic book value
Adjusted book value
Market value

Fair value
Arbitrage value
Discounted cashflow
Stochastic modelling

95
Q

SIMMERS

A

Sponsor is aware of financial significance of benefits
Informed decisions can be made
Mis-selling is avoided
Manages the expectations of members
Encourages take up
Regulatory requirement
Security of scheme improved as sponsor / trustees are made more accountable

96
Q

SOUNDER TRACTORS

A 
Size of the assets (absolute / relative)
Objectives 
Uncertainty of the liabilities 
Nature of the liabilities 
Diversification
Existing portfolio
Return (expected long-term)
Tax treatment of the assets / investor
Restrictions - statutory / legal / voluntary
Accrual of liabilities in the future
Currency of the existing liabilities
Term of the existing liabilities
Other funds’ strategies (competition) 
Risk appetite 
Solvency and accounting requirements
97
Q

STATiC

A 
Spurious
Time
Adverse
Temporary 
initial
Class
98
Q

SYSTEM T

A

Security (default and other risks)
Yield (real or nominal, running yield, expected return, compare with other assets)
Spread (volatility of market values, diversification)
Term
Expenses or Exchange rate
Marketability

Tax

99
Q

TECH SCAM

A

Types of assets that a provider can invest in
Extent to which mismatching is allowed
Currency matching requirement
Hold certain assets, eg government bonds

Single counterparty maximum exposure
Custodianship of assets
Amount of any one asset used to demo solvency may be restricted
Mismatch reserve

100
Q

TRAINERS

A 
Tables eg actuarial mortality tables
Reinsurers 
Abroad (data from overseas contracts)
Industry data
National statistics
Experience investigations on the existing contract
Regulatory reports and company accounts
Similar contracts
101
Q

TRAITOR

A 
Tax position
Regulation on investor
Assets already held
Income / cashflow requirements
Tastes (liabilities, education, fashion)
Other assets and other investors
Risk appetite
102
Q

A POLICY CEASES

A

Auction values

Profit (including recovery of costs incurred)
O
Lapse and re-entry risk
Increase in benefits will require underwriting
Consistency (with other payouts, premiums paid, and maturity values)
Y

Competition
Expectations
Asset share
Selection
Equity
Simplicity and stability
103
Q

ACCREDIT DOT

A 
Allow for key drivers
Calculations not overly complex
Clear results
Results validated
Easy to collect data
Documented
Inputs consistent
Tailored

Data validated
Output consistent (over time and with other analyses)
Timely production of results

104
Q

AGE ROT

A

Actions by central bank
Globalisation
Economic cycle

Return
Overseas influences
Type of investment

105
Q

CAB RIDES

A

Credit rating
Accounts / Financial metrics
Business outlook

Risk-based measures 
Independent Business Review
Default risk implied by market
Employer factors 
Scheme characteristics
106
Q

BALANCE FLACCID DAFT CRUMB

A 
Behaviour of third parties
Amounts of claims
Latent claims
Assumption on distribution
New classes
Catastrophes
Economic conditions
Development patterns
Frequency of claims
Legislation
Area (globalisation)
Climate change
Claim handling procedures
Inflation
Demand surge

Distribution channels
Arrangements for profit shares
Format of data
Third party handlers

Competitive pressure
Reserving philosophy
Unusual / large risks
Mix of business
Bodily injury claims
107
Q

CALMNESS Q

A 
Cancellations
Alterations in premium rates
Lapses
Mix of business
New business volumes
Endorsements
Strike rate
Source (persistency / profitability)

Quotation volumes

108
Q

CLOG RUM

A

Credit
Liquidity
Operational
Group

Reserve
Underwriting
Market

109
Q

CRAMPERS

A 
Credit rating agencies
Reinsurers and brokers
Auditors
Management
Policyholders
Employees
Regulators
Shareholders
110
Q

CRAFT CRAMPS VENDS DRILLS

A 
Catastrophes
Reporting delays
Accumulations
Frequency
Trends  
Currency 
Reinsurance
Amount (severity)
Moral hazard
Partial payments
Settlement delays 
Volatility
Event delays
Nil claims
Definition
Seasonality
Distribution
Reopened claims
Inflation
Large claims
Latent claims
Salvage and subrogation
111
Q

PALACE DICE

A 
PRE
Asset shares
Later durations ( maturity values )
Avoid discontinuities
Continuing policyholders
Early durations  (premiums )

Document clearly
Infrequent changes
Competition
Ease of calculation

112
Q

REDUCE DOG CRITIC

A 
RI share of ultimate claims and RI bad debt
Exhaustion of reinsurance and reinsurer
Downgrade assumptions
Ultimate gross claims (including CHE)
Ceded premiums
Expenses

Dividends
Operational losses
Gross written premium

Catastrophe claims
Reserve movements (gross), by COB
Inflation 
Tax
Investment returns, split by asset class 
Claims payment profiles
113
Q

REPEAT CAFE

A 
Regular reporting
Expert advice
Performance measurement
Explicit mandates
Activism
Transparency

Clear objectives
Appropriate benchmarks
Focus on asset allocation
Effective decision making and operations

114
Q

RICE AD

A

Risk assessment
Investment policy
Capital requirements
Evaluate existing portfolio

Allocate capital between classes
Determine return on capital

115
Q

SEMI COMA CRUNCH

A

Size of company
Existence of legacy systems
Management and staff
Integrity of data systems

Class of business
Organisation (nature of)
Method of sale
Age of company

116
Q

TRIM RILLS

A

Trends
Risk
Inflation
Mix

Reinsurance
IBNR
Large claims
Light experience
Sales channel
Cover
Regulations
Underwriting
Nil claims
Claims handling
Heavy experience

A311 Actuarial Risk Management (2020) - Contact on Linkedin for access (42 decks)

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