Description: Mr. Rallis will discuss trends in the market for risk transfer of defined benefit plans in the US. He will also address implications of increasing longevity.

Description: Read the September 2016 issue of International News published by the International Section. Newsletters provide practical information for the working actuary, articles on trends that impact sections and news about section activities.

Description: Read the September 2016 issue of Pension Section News published by the The Pension Section. Newsletters provide practical information for the working actuary, articles on trends that impact sections and news about section activities.

Description: View the full 2016 September issue of News Direct.

Description: Discussing impacts of innovation on the actuarial industry.

Description: The article discusses the sustainability of the ACA individual market from a public entitlement standpoint. A key point of measuring sustainability is the reliance on market forces rather than federal budget constraints. The article explains why an actuarial viewpoint of sustainability is necessary to a greater extent than other public assistance and social insurance programs. The article challenges actuaries to be a bold, objective voice in a space that is full of opinionated but often uninformed viewpoints.

Description: Hear from the chairperson on themes in the September 2016 issue of Pension Section News published by the The Pension Section.

Description: View In the Public Interest, September 2016 issue.

Description: Morning and afternoon exam booklets will include a formula package identical to the one attached to this study note. The exam committee believes that by providing many key formulas, candidates will be able to focus more of their exam preparation time on the application of the formulas and concepts to demonstrate their understanding of the syllabus material and less time on the memorization of the formulas.

Description: Many risk management decisions involve the timing of implementing risk strategies. The cost of hedging, capital raising and securitization changes with the economic environment. The timing of de-risking and investment in new risk management functions affect the cost and benefit of these projects as well. Like investment timing, it is important to consider the timing in risk management decisions to maximize the gain of risk management projects. This paper discusses methods of determining the appropriate timing of implementing a risk management strategy or investing in risk management projects. It explains the human biases that may lead to inferior timing decisions. It also covers the costs and benefits of risk management projects and the impact of new information on the decision-making process. Timing considerations for financial risk hedging, insurance risk hedging and investment in new risk management projects are explained. Factors used for timing decisions include economic conditions, market volatility, credit rating, borrowing cost, capital adequacy and financial resources.

Description: Stress tests and scenarios are often used as an informative tool to help stakeholders understand the risk profile of a firm. These analyses are often informational only and not directly linked to internal decision-making. This paper describes our approach to integrating stress tests into a regular decision-making process as part of our Own Risk and Solvency Assessment (ORSA). We have implemented a framework and analytical process that both enhances management’s understanding of our risk profile and links that to the development of our risk appetite. In this applied paper, we describe the framework and supporting analytics we established to achieve this goal and the practical implications for obtaining buy-in from senior management to establish this as an ongoing process.

Description: Insurance regulations are undergoing a paradigm shift in determining capital and reserves. With Solvency II in Europe and principle-based reserving in the United States, the old formula-based static approach is being replaced or supplemented by a principle-based dynamic method. This change requires enhanced modeling, stochastic simulation and sensitivity analysis, which pose challenges to insurers whose infrastructure has not been built for big computation. This paper introduces a method of building complicated models with small reusable modules and running them on a many-task computing platform to achieve high performance with simplicity. The paper presents an example of a term life insurance model built to take advantage of computer hardware for parallel computing at the task level.

Description: A sound enterprise risk management (ERM) framework functions as an ecosystem by balancing the interdependencies of its elements while constantly adapting to an ever‐changing, external environment. Each stakeholder has a unique role to play in forming a thriving ERM ecosystem by integrating risk‐conscientiousness in decision‐making. A resilient ERM framework has a single well‐ understood risk language and culture to promote healthy risk‐taking behaviors. The central focus of such a framework is concentrated around all stakeholders and everyone is held accountable. Every day, external forces can potentially disrupt how we operatively conduct business. Unforeseen changes in regulation, market trends, terrorist’s attacks and extreme natural disasters are often categorized as extremely adverse. How then will your ERM ecosystem survive the one‐in‐200 event and continue to flourish through dynamically changing environments?

Description: Insurance regulations are undergoing a paradigm shift in determining capital and reserves. With Solvency II in Europe and principle-based reserving in the United States, the old formula-based static approach is being replaced or supplemented by a principle-based dynamic method. This change requires enhanced modeling, stochastic simulation and sensitivity analysis, which pose challenges to insurers whose infrastructure has not been built for big computation. This paper introduces a method of building complicated models with small reusable modules and running them on a many-task computing platform to achieve high performance with simplicity. The paper presents an example of a term life insurance model built to take advantage of computer hardware for parallel computing at the task level.

Description: A sound enterprise risk management (ERM) framework functions as an ecosystem by balancing the interdependencies of its elements while constantly adapting to an ever‐changing, external environment. Each stakeholder has a unique role to play in forming a thriving ERM ecosystem by integrating risk‐conscientiousness in decision‐making. A resilient ERM framework has a single well‐ understood risk language and culture to promote healthy risk‐taking behaviors. The central focus of such a framework is concentrated around all stakeholders and everyone is held accountable. Every day, external forces can potentially disrupt how we operatively conduct business. Unforeseen changes in regulation, market trends, terrorist’s attacks and extreme natural disasters are often categorized as extremely adverse. How then will your ERM ecosystem survive the one‐in‐200 event and continue to flourish through dynamically changing environments?

Description: In a very general setting this paper describes a straightforward, non-parametric approach to aggregate "stand-alone" or marginal distributions with desired correlations without imposing additional assumptions on those marginals. We then develop two optimizations for the enterprise, one based on maximizing return on economic capital and the other based on a mean -semivariance efficient frontier from the investor point of view.

Description: This case study presents information for six companies. When you register for the ERM exam, you will select from one of six reading extensions. Information presented in this case study will be used in questions appearing on the one-hour extension-specific portion of the ERM exam. Please note that for those who are pursuing an FSA, the extension selected for this exam need not match the track selected for fellowship.

Description: Reviews basic desirable features in an economic scenario generator. Discusses basics of model structure and validation process

Description: Read the August 2016 issue of The Stepping Stone from the Leadership & Development section.

Description: Highlights a new research paper on determining discount rates for pension plans, by John Turner. The paper breaks new ground on deciding on the appropriate discount rate for untradeable benefit obligations, with a comprehensive summary of the field.

Description: A compilation of reader responses is presented to a real life situation posed involving a management, leadership, or other business decision. This issue’s case study involved whether an actuary who had recently started consulting should consider a job offer to return to a corporate role.

Description: The IAA Risk Book provides a set of high quality reference materials for use in managing the uncertainty of insurer risks.

Description: This article presents the results of the survey interviews, examining best practices as well as those areas that still remain challenging.

Description: Explains the method used to calculate Liquidity Cost Score and Price Impact Score. Describes the rationale for and applications of these methods.

Description: View the August 2016 Risks and Rewards.

Description: Read the August 2016 issue of Risk Management published by the Joint Risk Management Section. Newsletters provide practical information for the working actuary, articles on trends that impact sections and news about section activities.

Description: This publication is intended to serve as an in-depth primer on economic scenario generators. The first half of the publication provides more general information on the nature of economic scenario generators—what they are, how they evolved, how they address regulatory and business needs in the insurance and pension industries. It also addresses essential features of a good economic scenario generator, and provides some detailed guidance on important aspects of financial market model specification, model calibration and model validation considerations to assure that the ESG will produce simulation results that are relevant, sufficiently robust, and realistically reflect market dynamics. The second half of the publication provides technical discussion of some of the essential financial markets aspects of a comprehensive ESG. Description of arbitrage-free considerations, the role of risk-neutral scenarios, and default-free interest rate models are explored with some of the underlying mathematics necessary to understand these considerations. Final chapters provide some important considerations relating to corporate bond models and equity index models, and how these considerations may extend to international and global interactions.

Description: Up until recent past, the artificial intelligence portion of data science was looked upon cautiously due to its history of booms and flops . In the latest stream of events, major improvements have taken place in this field and now deep learning, the new leading front for Artificial Intelligence, presents a promising prospect for overcoming problems of big data.

Description: A review of the Bridging the Gap Series: Application of Predictive Modeling in VA/FIA Risk Management at the Equity Based Guarantees Conference in Chicago.

Description: Read the July 2016 issue of Product Matters!

Description: A discussion on how life insurers can improve the performance of their in-force portfolios.

Description: On October 30, 2015, the SOA Assumption Development and Governance Group, an informal discussion group consisting of nearly 200 interested actuaries with topics pertaining to actuarial assumption development and governance, organized an industry discussion call on end-to-end assumption documentation practices. The purpose of this call was to generate a large list of ideas for best-practice assumption documentation. More than thirty companies were represented in the call, including direct insurers, reinsurers and consulting firms. This article is the work product of the discussion written by Laurie Li and Alex Zaidlin.

Description: Full issue of Predictive Analytics and Futurism July 2016 newsletter.

Description: The objective of this article is to help indexed annuity writers understand the pricing practices and ALM strategies used by their peers in the industry, especially in light of the prevailing low interest rate environment and a possible rise in interest rates.

Description: Six years after the global financial crisis, the reshaped contours of the market for the life insurance industry are coming into focus.

Description: question and look for ways to make improvements on things by making them more efficient and intuitive. Mehmud did not study actuarial science in school. He earned a degree in mathematics and physics while taking courses like Asian history and skeptical thinking. In retrospect, he said, his exposure to a liberal arts education allowed him to view problems with a multifaceted perspective.

Description: Fall 2016 ILA LRM Case Study

Description: Fall 2016 Exam Syllabi

Description: Fall 2016 Exam Syllabi

Description: Fall 2016 Exam Syllabi

Description: Fall 2016 Exam Syllabi

Description: Fall 2016 Intro Study Notes

Description: Fall 2016 Syllabi

Description: Fall 2016 Syllabi

Description: Fall 2016 Intro Study Notes

Description: Fall 2016 Syllabi

Description: Fall 2016 Syllabi

Description: News Direct 2016 Issue Number 72 • MAY 2016

Description: If you'd like to start using the SOA CPD Tracker, or if you're already using it and have questions, you may find your answers here.

Description: The SOA provides information about the actuarial career path in health care and predictive analytics. Throughout 2016, we will share more about actuaries who are tackling some of the industry's biggest challenges and hear from top employers in healthcare analytics.

Description: Report summarizing the results of the 2015 PBITT UL with Secondary Guarantees Survey

Description: Practical Real-World Skills Gained Through Actuarial Online Modules

Description: Effective documentation is a critical component of model risk management. Several types of effective documentation are discussed.

Description: The April 2016 Issue of The Modeling Platform

Description: The article explores impact of resetting cap vs static cap choice for the GLWB rider for a Fixed Index Annuity for a Point to Point. Moreover, analysis of a Monthly Sum Cap is provided showing impacts of particular choices of market models (e.g. Black, Heston, Bates) used to price this deal.

Description: The authors explore a new approach to the premium persistency assumption in universal life products.

Description: In this article, the author explains what a CAT model is.

Description: This article walks through the history of model efficiency in the U.S. life insurance industry, examines its current application, and looks ahead to what we might expect to see in the future.

Description: Risk Management Issue 35 April 2016

Description: 2015 Annual Report

Description: Have you recently considered volunteering within the actuarial profession? If so, becoming a “friend” of the Smaller Insurance Company Section is a great way to start. This article explains what you can expect from your volunteer experience.

Description: Financial Reporter

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: On October 30, 2015, the SOA Assumption Development and Governance Group, an informal discussion group consisting of nearly 200 interested actuaries with topics pertaining to actuarial assumption development and governance, organized an industry discussion call on end-to-end assumption documentation practices. The purpose of this call was to generate a large list of ideas for best-practice assumption documentation. More than thirty companies were represented in the call, including direct insurers, reinsurers and consulting firms. This article is the work product of the discussion written by Laurie Li and Alex Zaidlin.

Description: Metadata for entire issue

Description: The author constructed the efficient frontier of new business sales by modeling the embedded value and economic capital against a universe of possible growth rates of the three lines of business in a typical three-year planning horizon. The ERM function can use the efficient frontier of new business to provide a more rigorous analysis of the impact of growth rates on the firm’s overall capital efficiency and value creation, hence forming a feedback loop with the businesses in the planning process to optimize the growth strategy.

Description: The Market Cost of Capital approach has emerged as the standard for estimating risk margins for insurers' fair value balance sheets. This paper takes some of the ideas developed for valuing life insurance liabilities and applies them to the problem of valuing credit risky bonds. The basic idea is that credit spreads should cover the cost a) best estimate defaults plus the cost of holding capital for b) contagion risk (e.g. a credit crunch) and c) parameter risk, this risk that the best estimate is wrong and must be revised. We argue that the margins required for parameter risk can capture liquidity issues. In addition, the models developed here allow the cost of capital rate itself to be a random variable which allows credit spreads to open and close stochastically. Finally, the paper argues that it is reasonable to include something like AA best estimate default rates and liquidity spreads when valuing insurance liabilities. The main rationale for doing so is the idea that there are elements of the total credit risk issue that can be hedged between the assets and liabilities.

Description: Adaptive Risk Management harnesses social intelligence to identify emerging risks. We have entered an age of disruption where exponential technologies are transforming every industry. The ability to pivot in a rapidly evolving ecosystem is essential. Centralized “predict and control” paradigms will increasingly fail as complex interactions drive phase transitions. Successful organizations will harness social intelligence to “sense and respond” to giant waves of change. Maps amplify intelligence to help us navigate challenging terrain. Maps play a central role in all command centres, enabling rapid risk identification with a shared visual language. Interactive financial network maps allow analysts to explore and diagnose systemic fragilities, and mitigate critical vulnerabilities. Dynamic financial maps can also build visual intuition to detect escalating risk patterns. After observing early warning signals, analysts can apply network analytics to estimate likely second order effects. This allows organizations to proactively manage emerging risk before tipping points are crossed.

Description: Adaptive Risk Management harnesses social intelligence to identify emerging risks. We have entered an age of disruption where exponential technologies are transforming every industry. The ability to pivot in a rapidly evolving ecosystem is essential. Centralized “predict and control” paradigms will increasingly fail as complex interactions drive phase transitions. Successful organizations will harness social intelligence to “sense and respond” to giant waves of change. Maps amplify intelligence to help us navigate challenging terrain. Maps play a central role in all command centres, enabling rapid risk identification with a shared visual language. Interactive financial network maps allow analysts to explore and diagnose systemic fragilities, and mitigate critical vulnerabilities. Dynamic financial maps can also build visual intuition to detect escalating risk patterns. After observing early warning signals, analysts can apply network analytics to estimate likely second order effects. This allows organizations to proactively manage emerging risk before tipping points are crossed.