Monitoring and responding to experience

Question 1

Why actuaries to determine liabilities?

Answer 1

1. Material: Solvency 2. Professionalism, incentive

Question 2

How is discount rate adjusted?

Answer 2

1. risk 2. liquidity

Question 3

Why do we review experience?

Answer 3

1. Learn risk Identify risk and their drivers, learn to avoid or mitigate them 2. Learn difference Review assumptions 3. Learn profit Profits and its source 4. Information to related parties

Question 4

What do we monitor

Answer 4

1. Insurance portfolio 2. Cash inflow 3. Cash outflow 4. Profit 5. Economic conditions

Question 5

What are insurance portfolio issues?

Answer 5

Business mix, acquisition, retention, lapse

Question 6

Monitoring process

Answer 6

objective -> collect and check data -> analyze (actual vs. expected, trend and drivers, attribution) -> validate and explain result

Question 7

What are cash in issues?

Answer 7

Premium, investment

Question 8

What are cash out issues?

Answer 8

Expense, claim

Question 9

What are economic condition issues?

Answer 9

Inflation, GDP, unemployment rate