Course co-ordinator(s): Prof Angus Macdonald (Edinburgh).
To introduce students to the actuarial techniques available to manage financial guarantees arising in life insurance companies in the course of their business operations.
Course Description: Link to Official Course Descriptor.
Learning Outcomes: Subject Mastery
At the end of studying this course, students should be able to:
- describe the asset types held by life companies and discuss their suitability to back different types of contract
- calculate the value of an insurer’s liabilities using both net and gross premium prospective valuations
- calculate the surplus arising on a portfolio of insurance contracts
- calculate non-profit premiums using the traditional method and the risk discount rate method
- discuss the ownership of surplus and the different types of bonus system which can be used to return surplus on with profits contracts
- calculate asset shares and describe their uses
- discuss how an actuary determines an appropriate level of reversionary and terminal bonuses for with profits contracts
- describe how unitised with-profits contracts work
- perform a simple analysis of surplus
- discuss the concept of solvency for a life insurance company and describe mechanical and model-based solvency margins
- calculate the fair value of life insurance liabilities
- discuss the concept of mismatching reserves
- discuss capital requirements for life insurance companies
- compare and contrast the lognormal and Wilkie models of equity returns
- carry out a simple asset/liability investigation of a life insurance company
This course and Pensions will be examined together in a 3-hour exam (80%) at the end of the 2nd semester. Both courses will have an assessed project (10% each).
SCQF Level: 10.
Help: If you have any problems or questions regarding the course, you are encouraged to contact the lecturer
VISION: further information and course materials are available on VISION