F70LP Life Office Practice

Prof Angus Macdonald

Course co-ordinator(s): Prof Angus Macdonald (Edinburgh).

Aims:

To introduce students to the actuarial techniques available to manage financial guarantees arising in life insurance companies in the course of their business operations.

Detailed Information

Course Description: Link to Official Course Descriptor.

Pre-requisite course(s): F70LA Life Insurance Mathematics A & F70LB Life Insurance Mathematics B .

Location: Edinburgh.

Semester: 2.

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

Assessment Methods: Due to covid, assessment methods for Academic Year 2021/22 may vary from those noted on the official course descriptor. Please see:
- Maths (F1) Course Weightings 2021/22
- Computer Science (F2) Course Weightings 2021/22
- AMS (F7) Course Weightings 2021/22

SCQF Level: 10.

Other Information

Help: If you have any problems or questions regarding the course, you are encouraged to contact the course leader.

Canvas: further information and course materials are available on Canvas