Description: This paper establishes a framework to analyze the volatility of corporate profits as a result of variability in accounting for pension plans. It models a Canadian corporation that maintains a defined-benefit pension plan and that has adequate cash flow to fully fund the pension plan, should it wish. Volatility of corporate profits is important because many senior executives have some component of their compensation directly related to corporate profitability and consequently do not want any surprises with respect to actual profits compared to expected profits. The volatility management techniques considered are investment policies for the pension plan, funding the pension plan, and an alternative plan design. The analysis is timely since changes are proposed to the accounting standards to eliminate most smoothing techniques. The results suggest that, depending on the investment environment, reduced volatility may be accompanied by by enhanced return, which is a result that few would expect.

Description: Many top-performing businesses aren’t just risk aware, but rather risk intelligent. Such a posture helps prepare companies for a major event and can demonstrate to a regulator or auditor that an appropriately strong control framework is in place. Better still, companies gain real strategic value from a “risk adjusted” understanding not only of their threats and vulnerabilities, but also the upside opportunities associated with various risks. It starts with having both qualitative and quantitative information to identify, assess and manage risks. Strategic risk management, at its core, is about creating value by increasing transparency and accountability, and quality of information. More than a mere compliance exercise, effective risk management enables more informed strategic decision making, increased accountability and transparency, a greater likelihood of organizational success, and – ultimately – competitive advantage, as borne out by many studies that correlate risk management and financial results.

Description: This discussion is on asset management for an insurance company, including issues of varying investment strategies for different product lines through various asset segmentation approaches, management of the assets supporting surplus, and asset/liability risk management considerations

Description: Speculative fiction story regarding time travel and implications.

Description: Metadata for entire issue

Description: This meeting session was held at the SOA's 1975 Annual Meeting in Bal Harbour. The topic presented was the public role of the actuary. Questions addressed were: A. Should the actuarial profession be more active in social issues? B. Do actuarial principles exist and should they be codified? C. How should actuaries react to the various publics they serve? D. Will the actuary evolve into a generalist who evaluates risks, whatever form they take? From the 1975 Record, Vol. 1, No. 4.

Description: This paper develops a conceptually rigorous formulation of the cost of capital method for estimating margins for mortality, lapse, expense and other forms of underwriting risk.