Actuarial Control Cycle Flashcards

1
Q

What are the 5 components in the Actuarial Control Cycle?

A
specify Problem
develop Solution
Monitor the experience
Professionalism
general commercial and economic Environment
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2
Q

Specifying the problem

A
  • set Objective
  • identify and analyse Risks
  • initial suggestion of Dealing with risks
  • consider viewpoint of all Stakeholders
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3
Q

Developing the solution

A
  • 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
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4
Q

Stakeholders

A
--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
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5
Q

Process of monitoring

A

-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)

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6
Q

Considerations for the homogeneous groups

A
-Volume of data
(credible vs homogeneous)
-potential Changes in the make up of the group
(heterogeneity within) 
-group's Risk factors
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7
Q

Data patterns

A
  • Trends
  • Cycles
  • Anomalies
  • Random variation
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8
Q

Considerations when revising models/assumptions

A

-Purpose
-Patterns
-divergence from Past
(potentially different groups moving forwards)

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9
Q

Role of the government

A

-direct Provision of benefits
-Education about importance of benefits
-Regulation
(compelling/encouraging provision + security)
-investment Vehicles
(and instruments)

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10
Q

Professionalism

A

-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

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11
Q

External Environment

A
  • Competition and underwriting cycle
  • Regulation and legislation
  • Environmental (&ethical) 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
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