This paper uses a mortality surge model to estimate the total financial impact on the U.S. insurance industry of a flu pandemic. It does not attempt to determine the probability of such a pandemic.

Formulas are derived to model the response of a money purchase, defined-contribution pension fund to the following types of investment shock: 1 an instantaneous fall in the value of the fund assets and 2 a permanent, uniform reduction in the rate of earned interest. An alternative defined-contribution fund, incorporating a variable defined-benefit scale, is then proposed, and its responses to the same investment shocks are compared with those of the money purchase fund. The comparison shows that the variable defined-benefit approach offers a useful alternative to the money purchase principle for defined-contribution pension funds.

In this article, we express a concern that certain commonly accepted methods of predicting mortality will likely prove to be inadequate in the future. Specifically, the Lee-Carter method, which overall has been empirically successful, uses auto-regressive moving average ARMA technology and contains no structural mortality equation. This structure means that no information other than previous history can be introduced. We argue that rapid advances in medical science are taking place and that failure to reflect this information in our projection methodology will make resulting projections unsuitable.

This paper describes a general deterministic model for the pricing of general insurance using optimal control theory. The authors focused on how the optimization problem is simplified as the assumptions of the model are changed.

Exploration of sources of volatility in retiree health valuations, noting how volatility arises and might be mitigated, with discussion of valuation parameters more problematic for retiree health benefits than for pensions. Three significant influences on retiree health valuation volatility are covered-- changes in benefit level, fluctuations in cost level, and alterations in eligibility for, or duration of, benefit – and attention focused on the last two. Specific conclusions result in recommendations, which are supported by practical examples contrasting volatile measurement results with those likely from the recommended practices. Theoretical discussion includes health claim variation, health trend usage, financial economics, option pricing, discount rates, and deterministic vs. stochastic modeling.

2012 SOA Health Meeting Session #61. This session will look at the move from LTC claim costs models, to first principles models, to stochastic models. The pros and cons of each approach will be examined. How various LTC product features are modeled under each and the precision available will be discussed. What new information is available from refined modeling techniques and how this information can be used by the industry will be presented.

The comments of DxCG about their participation in the SOA study A Comparative Analysis of Claims-Based Tools for Health Risk Assessment.

This session discusses the use of deterministic and stochastic models to report reserves with implications in enterprise risk managment. From the May 2008 SOA Health Spring Meeting, Session 29

2012 SOA Health Meeting Session #54. The Patient Protection and Affordable Care Act (PPACA) will significantly impact an employer’s decision to offer coverage and an individual’s decision to obtain coverage. These decisions, in turn, could significantly impact the operations and financial positions of association groups and multiple employer welfare arrangements (MEWA). Additionally, they could have a significant impact on individual and small group blocks of business. This session will begin with an overview of provisions of PPACA that impact the employer and individual decisions on coverage followed up by a discussion of how these decisions impact an association group’s business model and how to go about analyzing this impact. This will be followed up by an overview of the steps a MEWA based in California is taking to compete in the post-2014 health care landscape from an actuarial/rating and marketing standpoint.

The author provides an overview of terms that have gained favor in sociology, physics, engineering and anthropology that should be of interest to actuaries.