Actuarial Control Cycle Flashcards
What are the 5 components in the Actuarial Control Cycle?
specify Problem develop Solution Monitor the experience Professionalism general commercial and economic Environment
Specifying the problem
- set Objective
- identify and analyse Risks
- initial suggestion of Dealing with risks
- consider viewpoint of all Stakeholders
Developing the solution
- consider new and existing Models and choosing the most appropriate
- make Assumptions
- interpret model Results
- consider from perspectives of all Stakeholders
- determine Solution and Alternatives
- formalise Proposal
Stakeholders
--Management (board of directors, trustees, sponsoring company) --Employees --Recipients of the products (policyholders, members, dependents) --Regulators --Investors (shareholders, policyholders, sponsors) --Competitors --Government --Financial institutions (reinsurers, bank, consultants) --Debtors/Creditors
Process of monitoring
-Group data into homogenous groups
-Identify patterns in data +differences between actual and expected results
-use results to Revise models and assumptions
(based on PPP)
(+ use revised information to control the situation feedback into the cycle)
Considerations for the homogeneous groups
-Volume of data (credible vs homogeneous) -potential Changes in the make up of the group (heterogeneity within) -group's Risk factors
Data patterns
- Trends
- Cycles
- Anomalies
- Random variation
Considerations when revising models/assumptions
-Purpose
-Patterns
-divergence from Past
(potentially different groups moving forwards)
Role of the government
-direct Provision of benefits
-Education about importance of benefits
-Regulation
(compelling/encouraging provision + security)
-investment Vehicles
(and instruments)
Professionalism
-Professional conduct standards
-Ethical and Technical actuarial standards
-consider from perspective of all Stakeholders (protect public interest)
-recognising Others have valid views
-hold no Conflicts of interest
-Communicate well
-achieve, demonstrate, maintain and improve Competence
-act with another Integrity
-build trusting Relationship with client
-act Reliably
(quality, detail, and timeliness)
-take Responsibility for actions
External Environment
- Competition and underwriting cycle
- Regulation and legislation
- Environmental (ðical) issues
- Accounting standards
- Tax
- Economic outlook
- Governance
- Risk management requirements
- Experience from overseas
- Adequacy of capital
- Trends (demographic)
- Lifestyle considerations
- Institutional structure
- Social trends
- Technology
- State