F71LA - Life Insurance 1

Course leader(s):

• Jane Braithwaite (Edinburgh, September)

Syllabus

1. Key concepts in life insurance (1.1 Introducing the balance sheet, risk & uncertainty, and the individual versus the collective)

2. Valuing life insurance policies (2.1 • Describing how asset share is built up, including using a recursive formula, 2.2 • Describing the main uses of asset share, 2.3 • Describing the use of a valuation basis, 2.4 • Describing the gross premium and new premium policy valuation methods, 2.5 • Describing the recursive relationship between policy values over time)

3. Strain, surplus and profit (3.1 • Describing the effect of the differences between the gross premium and new premium valuation methods, 3.2 • Describing the concept of surplus, and sources of surplus, 3.3 • Describing the interaction between the premium, valuation and experience bases, 3.4 • Describing and applying how to analyse surplus into its various sources)

4. Assets and Investments (4.1 • Describing the main asset classes in which life insurance companies may invest, 4.2 • Describing the principles of investment, with reference to matching liabilities and level of free assets)

5. Bonus and cost of bonus (5.1 o Describing different with profits bonus distribution systems, in particular the concept of reversionary and terminal bonuses, 5.2 o Describing conventional and unitised with profits products)

6. Life insurance products and the general business environment (6.1 • Describing the key features of the main products which a life insurance company writes, including, 6.2  Savings, protection and income products, 6.3  Without profit and with profit products, 6.4  Conventional and linked products, 6.5 • Describing the background in which the insurance company operations, including, 6.6  Distribution channels, 6.7  Legislation and regulation, 6.8  Professional matters)

7. Sources of risk and risk management (7.1 • Describing the main sources of risk within an insurance company, 7.2 • Describing ways in which the main sources of risk within an insurance company can be managed or mitigated)

Learning outcomes

By the end of the course, students should be able to do the following:

• apply the concepts of policy values, asset shares, bonus and “analysis of surplus” to unseen problems in life insurance.
• analyse whether proposed solutions to life insurance problems are appropriate, where those problems rely on ideas of risk, life insurance products, the general business environment and other key concepts in life insurance.
• synthesise knowledge of risks and other topics in life insurance to generate ways of implementing effective risk management in unseen scenarios.
• evaluate solutions to unseen problems in life insurance which rely on ideas of risk, life insurance products, the general business environment and other key concepts in life insurance.
• communicate technical and broader issues from the life insurance environment.

Further details

Curriculum explorer: Click here

SCQF Level: 11

Credits: 15