Description: This paper first derives the fair participation rate based on a fair value of the equity-indexed annuity EIA. Then using risk measures, a new participation rate is obtained, based on the tail loading of the hedging error distribution. Risk management strategies reducing risk related to the hedging error are also presented. A detailed numerical analysis is performed for a point-to-point EIA.

Description: The basic principle introduced in this paper is that the expected value of receipts on any insurance policy is equal to the expected value of payouts. Using an expected value approach, rather than present values, offers an interesting conceptual framework which might provide a possible starting point in risk theory to consider statistical variation about these expected values.

Description: This article summarizes the presentations by the Society of Actuaries and the Academy of Actuaries at the January 2015 National Academy of Social Insurance (NASI) Roundtables in Washington DC. SOA presented on the 2014 SOA monograph series "The Link between Retirement Security and Long-Term Care."

Description: This article discusses how to get data into and out of R, an open source language for statistical computing.

Description: Continuation of article from previous issue. This article illustrates the practical and financial implications of applying nested stochastic techniques to a sample product.

Description: Description of the vast variety of predictive analytics topics covered by the Forecasting & Futurism section and introduction to the July 2015 issue of the newsletter.

Description: It is worth the effort to obtain a pricing surface. It helps make an informed decision and facilitate the pricing conversation within and outside a company.

Description: This article explores the possibility of using machine learning to improve, or potentially rewrite, actuarial code within actuarial software.

Description: This article discusses the need for a sophisticated modeling system capable of analyzing the impact of the variables present in pension plan projections and providing management with information which it may act upon.