Description: The Financial Reporting and Product Development Sections, along with the Committee on Life Insurance Research are pleased to make the following report available. Prepared by Bruce Rosner of Ernst & Young, the report summarizes the findings of a stochastic modeling efficiency study. With the help of twelve life insurance and annuity companies, the study tested six techniques for reducing the number of model points or scenarios required to achieve a given level of precision in stochastic actuarial modeling.

Description: This article addresses the concern that while risk assessment models are supposed to help identify and reduce risk, they can be a source of risk themselves. A new report released by the Canadian Institute of Actuaries in August 2008 helps address that potential problem by providing useful guidance to actuaries who are charged with designing, implementing and using advanced models.

Description: While Model Efficiency and Model Governance may seem like completely separate topics, there is an intersection of them that should be of growing interest to modeling actuaries. This column from the Modeling Section Chair explores this area, asking how we will govern the increasing use of innovative modeling efficiency techniques.

Description: Actuarial models have always been an important tool for helping companies project future results and understand risks. As complex models have started to become critical components of the reporting and compliance processes, however, models have vaulted to new levels of importance—and of scrutiny. This has raised everyone’s interest in the management of models, and by implication, in their ability to control the inherent model risk. From Small Talk Newsletter, Issue 37, January 2012.