Description: it discusses the framework and modeling of the market consistent valuation of fixed indexed annuity, against the backdrop of the convergence of accounting standards and internal risk management.

Description: Complete issue of the August 2014 Risk Management newsletter.

Description: This article discusses the risk management approaches of insurers. The author described some of the current practices of the total return approach, how the total return approach is used in managing risks as a process, and a model that takes future sales into consideration and determines the appropriate fair valuation method of an ongoing business.

Description: This article discusses unauthorized trading scandals — commonly referred to as “rogue trading”.

Description: Read the March 2017 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: Article from Risk Management Newsletter, March 2006, No. 7 on the growing Risk Management Section. Year 2005 was a year of emarkable growth for the joint CAS/SOA Risk Management Section, as casualty actuaries joined in force. More than 500 members of the CAS have joined the section, bringing the total section membership to about 3,000.

Description: Risk management techniques do not include system science. System science requires that the uncertainty of the world is incorporated into the results. The articles explains the difference between risk and uncertainty. Learn how risk practices create an overoptimistic view of future outcomes.

Description: Life and annuity markets around the world have seen increasingly complex investment-combined products, including universal life, fixed indexed annuities, variable annuities with a wide variety of guaranteed benefits and indexed variable annuities. Insurance companies are facing unprecedented exposure to financial risks in addition to traditional mortality and longevity risks. The risk assessment and modeling for such complex designs by conventional methods often focus heavily on their market competitiveness and profitability. However, there seems to be a lack of quantifiable and systematic approaches to assess investment risks associated with investment combined products. The objective of the proposed work is to develop a framework for quantifying and analyzing various forms of contractual designs and showcase different techniques to assess the trade-off between competitive contractual designs and their practical implications regarding the difficulty of risk management.

Description: This paper applies the research in Prospect Theory of Kahneman and Tversky to explain why sales of annuities lag sales of life insurance products. The author theorizes that life insurance is easier to sell because customers perceive themselves to be in the domain of losses, while potential annuity customers perceive themselves to be in the domain of gains. Kahneman and Tversky showed us that people are mostly risk averse in the domain of gains and risk seeking in the domain of losses. Purchase of an annuity or life product is a risky investment. Customers will find it easier to take the risk in the life insurance domain of losses than the annuity domain of gains. The author then proposes a hybrid life annuity product that might address both mortality and longevity risk in one product that would allow both products to be more competitive than stand-alone products.

Description: Chairperson's Corner is the introduction to the JRMS newletter.