Description: Metadata for entire issue

Description: Recent advances in mortality modeling have enabled applicant-specific quantification of mortality risk in life insurance applicants using laboratory and physical measurements. Relative to more conventional underwriting, this approach identifies a small population of significantly under-priced policy and a much larger, cross-subsidizing group whose risk is presently overestimated. Applicants placed in the highest percentile by this scoring methodology are more than 10X as likely to die in a given period as their demographic peers, and represent approximately 5% of short-term claims. Implications for product design are substantial in both the short- and long-term, as the possibilities for adverse selection grow, and the opportunity for fully individualized pricing raises the more distant prospect of products with as many rate classes as applicants.

Description: View the complete issue for the August 2014 Reinsurance News newsletter.

Description: The purpose of this paper is to explore pension plan metrics— – measuring the behavior of a defined- benefit pension plan in an uncertain environment. Our goal is to measure and evaluate the quantitative impact of competing policy choices. We proceed by investigating some basic pension metrics, evaluating the characteristics of each using a simulated pension plan. We find that some typical metrics— – such as the mean and standard deviation— – are useful only in certain circumstances and that other less traditional measurements are sometimes better suited to evaluating policy choices.

Description: This article discusses a good way for insurance companies to calibrate economic capital (tail risk level) that is consistent with the market opinion on its risk. It also establishes a bridge between a risk neutral evaluation and a real world evaluation.

Description: Building on the Part 1 article, Introduction to the Representative Scenarios Method, this article describes testing the methodology with respect to four product types, fixed indexed annuities with GLIBs, level term life insurance, universal life with secondary guarantees, and variable annuities with GLWBs. This Part 2 article describes testing results, refinements to the RSM methodology, and next steps.

Description: Is Risk/Return a sound tool for decision-making? No. It is not consistent, not objective, distorts decision and degrades governance. Why? What shall we do then?

Description: Is Risk/Return a sound tool for decision-making? No. It is not consistent, not objective, distorts decision and degrades governance. Why? What shall we do then?

Description: Update on issues, priorities and key messages from the Joint CAS / CIA / SOA Risk Management Section Council.