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 to section members on professional development tool EBSCO Business Source Corporate Plus.

Description: Summary of research project designed to document method to credit interest rates to account value based products. The investment year method (IYM) can theoretically align with investment strategy and be fair to policyholders. These products were designed in the 1980s with guaranteed nominal rates above what is currently accessible so most products credit the guaranteed rate. This paper documents how it could be resurrected during the next interest rate cycle.

Description: Describes the construction of the CBOE's VIX index. Shows mathematically how the variance of investment returns is reflected in the price of the index. Provides a rational explanation of technical factors that lead the index to perform inconsistently with market sentiment. Highly relevant for any hedger seeking to use the VIX index.

Description: The article introduces a cashflow matching strategic asset allocation (SAA) framework for life insurers. Given the recent shift to higher interest rates after two decades of persistent low interest rates, insurers have an opportunity to enhance their asset liability management by rebalancing asset portfolios to narrow duration gaps and attain higher risk-adjusted yields. The framework aims to align investment objectives with economic, regulatory, and rating agency requirements. It prioritizes cashflow matching as the primary optimization goal and incorporates security-level asset information to assist portfolio managers in executing SAA seamlessly. The article highlights the benefits of the cashflow matching SAA framework, including greater attention to cashflow matching, unbiased results, readily executable strategies, and stable economic reserves. A case study is included to demonstrate the effectiveness of the framework in improving risk-adjusted return and cashflow matching for a representative liability block.

Description: Read the February 2020 issue of Risks & Rewards newsletter published by the Investment Section. Newsletters provide practical information for the working actuary, articles on trends that impact sections and news about section activities.

Description: Feature article provides a glimpse into recent changes to various standards of care owed to customers that will undoubtedly have a significant impact on the products and services offered by many financial institutions.

Description: Article from Investment Section staff partner describing the newsletter production process.