Chapter 0 - Actuarial Control Cycle Flashcards
Components of the ACC?
- The General Commercial and Economic Environment
- Specifying the Problem
- Developing the Solution
- Monitoring the Experience
- Professionalism
Describe General and Economic Economic Environment?
- Sets the scene
- ensures awareness of the environment in which the problem is being solved
- ensures awareness of the impact on the environment by decisions made.
Describe stage 1 of the ACC - Specifying the Problem?
- Identify and analyse the risk of each stakeholder
- Sets outs the problem from each stakeholder’s point of view
- Considers strategic course of action to handle a particular risk
- Gives an assessment of risks faced and how manage. mitigate or transfer them
- Reflects desire to manage risk
Describe stage 2 of the ACC - Developing the Solution?
Examine existing models and how it can be adjust for the problem at hand.
Selection of the most appropriate model or design of a new model.
Setting assumptions and understanding sensitivities
Interpretation of the results
Implications of results on overall problem
Implications of results in stakeholders
Determining proposed solution
Consideration of alternative solutions and effects on the problem
Formalising a proposal
Communicate proposed solution and alternatives to decision makers
Describe Stage 3 of the ACC - Monitoring Experience?
- Models should be dynamic and reflect current experience
- This needs to be monitored
- Feeds back into the Problem Specification and or Solution Development
What makes the ACC ‘Control Cycle’?
- Importance of monitoring and feedback
- Inter-relationship between elements of the cycle
- Feedback mechanism isn’t automatic
- Requires expert judgement
What makes the ACC Actuarial?
- Uncertain future events
- Long-term
- Recognition of stakeholder’s requirements and risk profiles
- Short term decisions for future outcomes
- Use of models
- Use of assumptions
- Application of professional judgement
