General Flashcards
Actuarial control cycle
- Specify problem
* Identify risk
* Analyse risk - Develop solution
* consider available models
*select appropriate one or create new
*run model
*interprwt results
* consider result implications
*draft1 of proposal
*consider alt proposal
*final proposal - Monitor and feedback
+professionalism
+external factors
Risk based capital assessment process
- Produce economic balance sheet
- Calculate mva
- Calc mvl
- Determine available assets
- Calculate available assets
*mva - mvl - Compare against economic capital
- Market values of assets and liabilities are available from financial markets
- If asset/liability is not liquid - won’t find value from financial market
- Illiquid assets need different approach
*internal model - authorised by regulator
*external sources - Market value for Annuity liabilities are not easy
*can use pv of expected future cashflows
*be + margins - Assumptions to be used
*longevity
*expenses
*inflation
*return - Assets and liabilities have to be evaluated on same consistent basis
- Must test assumptions
Develop the solution steps
- Evaluate current actuarial models
- Select/construct appropriate model
- Select assumptions
- Interpret results
- Consider implications of results
- Determine proposed solution
- Consider alternate solution
- Formalise proposal
Stakeholder types of advice
- Indicative
* giving opinion without fully investigating the issues - Factual
* based on research and facts - Recommendations
*research and modelled forecasts
* weight alternatives
* make recommendations with requirements
*peer review
External environment list
Create great lists
1. Competition and UW cycle
2. Regulation and legislation
3. Environmental issues
4. Accounting standards
5. Tax
6. Economic outlook
*interest, inflation, growth, exchange
7. Governance
8. Risk management
9. Experience from overseas
10. Adequacy and solvency capital
11. Trends
12. Lifestyle
13. Institutional
14. Social
15. Technology
16. State benefits
Aims of regulator
Grip
1. Give confidence
2. Reduce crime
3. Inefficiencies corrected
4. Protect consumers
Functions of regulator
Service
1. Setting sanctions
2. Enforce regulations
3. Review and influence gvt policy
4. Vetting and register firms
5. Investigate breaches
6. Check management and conduct
7. Educate consumers and public
Types of regulatory regimes
- Unregulated
- Self regulation
- Voluntary codes of conduct
- Statutory
- Mixed
Contract design factors
Direct factors sampler
D discretionary benefits
I interest and needs of customers
R risk appetite
E expenses vs charges
C competition
T terms and conditions
F financing
A accounting implications
C consistency with other products
T timing of contributions
O options and guarantees
R regulatory requirements
S subsidies
S stakeholder characteristics
A administrative systems
M market for products
P profit
L level and form of benefits
E early leavers
R requirements for capital
Principal factors contributing to variations in mortality and morbidity
HIV
housing
*weather
*invome
Geography/climate
*access to stuffs
*accidents
*weather
Genetics
Education
Nutrition
*subnutrition
*malnutrition
*society
Occupation
*prev occupation
*classification (wives and hubs)
*stats
Politics
Selections list - homogenous
Tacts
Temporary
*select effect of tables - wears out soon
Adverse
*what anti selection is based on
Class
*permanent characteristics that cause homogeneity
Time
*changes because of things like mortality improvement
Spurious
*confounding factors at plays
*England vs wales
Insurable Interest
- Interes t in risk being insured
> financial
> reputation - financial & reasonably quantifiable
- amount insured must be closely related to financial loss incurred
