Description: This is the second of three articles. The first April issue told how the 1973 Experience Table was constructed. Outlined here are two steps: i projecting the values in the 1973 Experience Table to produce the 1983 Basic Table, and ii reducing the 1983 Basic Table q's to arrive at the recommended annuity valuation table called the 1983 Table a.

Description: a review of a paper by R. H. Daw, F.I.A. entitled “Smallpox and the Double Decrement Table: a piece of actuarial prehistory.”

Description: This is about The Federal Register of October 18, 1982 announcement by the Veterans Administration concerning USGLI premiums. The premiums were based on the American Experience Mortality Table at 3 /2% interest which overestimates mortality and underestimates the interest rate. This article discusses the ramifications of this.

Description: This article provides an analysis of the AIDS case data collected and made available by the Centers for Disease Control. The CDC data base is at the individual level and includes age at diagnosis, date of diagnosis, sex, sexual preference, locale, type of infection transmission, etc.

Description: Recent advances in mortality modeling have enabled applicant-specific quantification of mortality risk in life insurance applicants using laboratory and physical measurements. Relative to more conventional underwriting, this approach identifies a small population of significantly under-priced policy and a much larger, cross-subsidizing group whose risk is presently overestimated. Applicants placed in the highest percentile by this scoring methodology are more than 10X as likely to die in a given period as their demographic peers, and represent approximately 5% of short-term claims. Implications for product design are substantial in both the short- and long-term, as the possibilities for adverse selection grow, and the opportunity for fully individualized pricing raises the more distant prospect of products with as many rate classes as applicants.

Description: Highlights of the 2001 Manulife Reinsurance Mortality Study conducted in conjunction with the Reinsurance Section on the mortality experience of large amount and older age policies.

Description: Feature article discussing the Life Settlements business: recent growth, pricing, and future of the business.

Description: This presentation shows how the the linear model is derived assuming that the force increases linearly over the year.

Description: The values of life insurance and annuity liabilities move in opposite directions in response to a change in the underlying mortality. Natural hedging utilizes this to stabilize aggregate liability cash flows. Our study shows empirical evidence that insurers who utilize natural hedging also charge lower premiums than otherwise similar insurers. This indicates that insurers who are able to utilize natural hedging have a competitive advantage. In addition, we show how a mortality swap might be used to provide the benefits of natural hedging to a firm that writes only one of the lines of business.

Description: This graph indicates the overall historical trend in life expectancy at age 65.