Description: Irish actuary and professor explains his hypothesis that actuaries, as practitioners, are reluctant to adopt the theories of financial economists unless the models on which the theories are based fit the actual data the actuaries have.

Description: A critical step in valuing a company for the purpose of financial reporting is the computation of the market value of economic surplus (MVES). This article provides a novel approach to the valuation of MVES that is stable and reasonably immune to “market noise.” Current approaches to the calculation of economic surplus of an insurance company generally define such surplus as the market value of the assets (MVA) supporting the liabilities less the market value of liabilities (MVL). While MVA is observable in the market, MVL is typically computed directly, without regard to the underlying supporting assets. Subtracting MVL from any value of assets that changes with market movements results in an unstable surplus. Consequently, a surplus that is not fully reflective of market sentiment has been rejected by many. This same approach is further used in the calculation of market consistent embedded value (MCEV) when a balance sheet approach is used .

Description: Sustainable operations under changes in accounting principles and solvency standards

Description: Table from an article from The Actuary Magazine entitled Outsourcing of General Account Investments.

Description: Table from an article in The Actuary Magazine entitled Outsourcing of General Account Investments.

Description: This article gives an overview and explanation of behavioral finance.

Description: As we meet with pension plan sponsors and consultants across Canada we find that the subject of liability-driven investing LDI comes up repeatedly even when we do not initiate the discussion. We also find that LDI seems to mean something different to each person we meet. Is LDI just a new name for asset/liability management ALM? Or is LDI just about hedging interest rate risks with fancy securities? In this article we describe a framework for understanding what LDI is, how it relates to ALM, and how it can be used to solve real-life problems for Canadian pension funds.

Description: The SEC recently approved a financial disclosure rule mandating that a company must release material and market-moving information to all investors simultaneously. This article looks at the new rule designed to make financial disclosure fairer for all investors and how it may pose problems for larger insurers, while it may level the playing field for smaller insurers.

Description: This article examines potential approaches to the calculation of the risk adjustment component, with a focus on a case study related to a UL product.

Description: This article aimed to make Liability Driven Investing LDI more accessible by providing a simple definition and by showing how plans of different sizes and circumstances may adopt an appropriate LDI approach.