Week |
Subject |
Related Preparation |
1) |
Concept of financial strength. Variation in valuation of assets and liabilities in a stochastic world. Free reserves and margin to cushion against adverse variations |
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2) |
Concept of liquidity. Types of risk (e.g. asset risk, interest-rate risk, pricing risk, business risk etc).
Statutory calculation of solvency margin in Turkey.
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3) |
Ways to manage and reduce risk. Immunisation theory. Reinsurance. Projection of future solvency margin and use of solvency theory in managing a life company. |
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4) |
Introduction to profitability. Distinction between one year result and long-term profitability. Concept of profit signature and its shape for different life insurance products. |
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5) |
Mortality profit: derivation of formulae for mortality profit. Specific premium loadings to provide expected profit. Building a simple excel model for profit and comparing profitability when mortality results differ from expectations. The difference between the mortality effect for survival-based products and death-based products
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6) |
Mortality profit: exposure to risk analysis for a life-insurance portfolio. How to deal with adverse mortality results. Mortality improvements. |
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7) |
Lapse profit: derivation of formulae for lapse profit. Using a run-off triangle cohort analysis to calculate lapse experience. Methods of avoiding adverse experience.
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8) |
Investment profit: derivation of formulae for investment profit. Investment strategies. Mathematical reserve curves for different types of products. Profit-sharing. |
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9) |
Expense profit: concept of acquisition and administration expenses. Use of allocation keys to allocate actual expenses between products. Building an expense model. Calculation of expense overrun and underrun. |
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10) |
Life margin analysis: re-expressing the P&L account into the actuarial lines of interest margin, mortality margin and expense margin.
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11) |
Assumption setting process. The concept of best-estimate. Risk-free rate. Market-consistency, yield curves and discounting future profits.
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12) |
New Business Value and building a simple model to calculate NBV for a simple product.
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13) |
Valuing an insurance company. Weaknesses of a pure balance sheet approach. Embedded value. Appraisal value. KPIs looked at by share analysts.
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14) |
Other uses of projected cash flows, in particular Solvency II. |
|
15) |
Final Exam. |
|
16) |
Final exam. |
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Program Outcomes |
Level of Contribution |
1) |
Acquire the quantitative skills to become an actuary. |
3 |
2) |
Will know about risks and ways to manage risk. |
4 |
3) |
Will know about financial planning and its role in actuarial management. |
4 |
4) |
Will be able to design new products and carry profitability tests and scenario analyses. |
5 |
5) |
Besides gaining competence in theoretical subjects, the graduate will also be aware of practical issues and applications through lecturers and instructors who have market experience. |
4 |
6) |
Will be able to follow all innovations and carry on research on the particular area. |
3 |
7) |
Will share information with colleagues and will use it for project development.. |
4 |
8) |
Will be able to apply and make the necessary adaptation to all new rules and regulations. |
4 |