Chapter 0 - What is A311 all about

Question 1

What makes the ACC “actuarial”?

Answer 1

PALM MEC

• application of Professional judgement
• the use of Assumptions based on historical experience
• a Long term rather than short term horizon
• the use of Models to represent future financial outcomes
• Modifying models in light of new experience
• Estimating the financial impact of uncertain future events
• Considering stakeholders’ requirements, legislation, regulation, taxation, competition

Question 2

What does “specifying the problem” stage in the ACC involve?

Answer 2

• identify and analyse the risks of various stakeholders in detail
• consider the actions that can be taken to manage the risks in question or mitigate or transfer the risk

Question 3

What does “ developing the solution” stage of the ACC involve?

Answer 3

• examining existing models and choosing the appropriate model or developing a new model
• assumptions to be used in the model, and a good understanding of their sensitivities
• interpretation of the results of the model and considering the implications of the results on the overall problem as well as the stakeholders
• determine a proposed solution to the problem and alternative solutions
• formalising a proposal
• communicating the proposed solution and their alternatives

Question 4

What does “monitoring the experience” stage of the ACC involve?

Answer 4

• analyse individual elements of experience in order to compare actual experience with what had been assumed
• identifying sources of departure from what was expected and determining whether it is likely to recur
• any deviations that are deemed likely to recur must be fed back into the problem specification and solution development stage
• monitoring should occur frequently