Course co-ordinator(s): Andrew David Stott (Edinburgh).
Aims:
The purpose of the Actuarial Risk Management course is to embed the skills necessary to run:
- a life insurance company; or
- other related enterprise.
The core skills are introduced here and expanded in other courses
Summary:
- To provide students with a thorough grounding in the strategic concepts required to manage the business activities of financial institutions and programmes.
- To provide students with an understanding of the various types of risk faced and the processes used to manage those risks.
- To enable students to make use of those processes in order to formulate, justify and present plausible and appropriate solutions to business problems.
Detailed Information
Course Description: Link to Official Course Descriptor.
Pre-requisites: none.
Location: Edinburgh.
Semester: 2.
Syllabus:
Solving a Commercial Problem
- The requirements and use of a model and how its results should be tested
- How model assumptions should be determined
- The expenses that should be considered
- How costs of providing benefits based on contingent events should be determined
- How prices should be set to pay for benefits based on contingent events
- The principles, objectives and measures of investment management
- The approaches to establishing provisions
- The relationship between assets and liabilities
Living with the Solution to a Commercial Problem
- Approaches to maintaining profitability
- How expected results can be projected
- How actual results are reported and what systems are required to do this
- The issues facing the providers of benefits on contingent events relating to the reporting of risk
- The principles of asset management and allocation
- The principles of capital management
- The management of surplus and the issues surrounding its distribution/retention
- The issues that need to be taken into account on insolvency or closure
- The issues surrounding the management of options and guarantees
Ongoing Monitoring
- How experience is monitored and models/assumptions revised
Principal Terms
- The principal terms used in financial services and risk management
Learning Outcomes: Subject Mastery
After studying this course, students should be able to:
- Be able to design appropriate models and make appropriate recommendations based on their results;
- Be able to discuss the different approaches to investment management;
- Be able to explain why provisions need to be established;
- Know how to establish provisions for different types of liabilities, if necessary taking into account the assets backing them;
- Be able to describe how a company is managed on an ongoing basis, particularly in respect of projecting future results, reporting results and managing assets, capital and any surplus arising;
- Be able to discuss the issues surrounding the management of options and guarantees;
- Be able to explain how actual experience is monitored and taken account of; and
- Be able to describe/explain the principal terms used in financial services and risk management.
In addition, students will:
- demonstrate the ability to learn independently and as part of a group;
- manage time, work to deadlines and prioritise workloads;
- present results in a way that demonstrates an understanding of the workplace, market place and general environment; and
- understand the importance of risk management.
Reading list:
There is no required reading for the course. However, students are expected to read more widely in order to develop a ‘common sense’ in respect of managing actuarial risks. The following covers the content of the course:
- Understanding Actuarial Management: the actuarial control cycle edited by Clare Bellis, Richard Lyon, Stuart Klugman and John Shepherd, published by The Institute of Actuaries of Australia.
SCQF Level: 11.
Credits: 15.
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