Description: Introducing the Respresentative Scenarios Method, the Motivation and Goals, how the methodology works, and what key information can be derived.

Description: A discussion of setting margins for financial reporting of insurance contract liabilities, with a focus on the cost - of - capital approach.

Description: Since insurance contract liabilities are uncertain in amount, an estimate is required. And under most accounting frameworks, the estimate of an uncertain amount should contain some sort of margin for uncertainty. This paper provides a mathematical connection between that margin and the market price of risk as measured by the cost of capital. The connection makes use of the theory of utility and an exponential utility curve.

Description: This article is an update, as of March 2019, on Financial Reporting Section sponsored projects in process and those recently completed.

Description: The author refers to a separate article in this edition of Risks and Rewards, in which Babbel, Gold and Merrill provide an excellent exposition of three approaches to present-valuing a series of risky cash flows and provide several insights into the way modern finance theory deals with risk. The purpose of this article is to bring these insights to the world of insurance risks and view them in relation to existing actuarial techniques. The author also discusses direct discounting and the actuarial appraisal method and their consistency.