Description: This article discusses the concept of Conservation of Mortality ("Conservation"). Conservation is the modeling principle that ensures consistency between assumptions of the total mortality of a population and mortality among population subsets. This article discusses the use cases for Conservation and the many ways that one could implement it in a model or an experience study. This article also discusses the potential issues that arise when using Conservation, and how one might solve or alleviate these issues.

Description: Discussion of the appropriate use of geometric versus arithmetic average returns to use in a stochastic interest rate generator to be equivalent to a deterministic single interest rate scenario.

Description: An overview of guaranteed lifetime withdrawal benefits (GLWB) on registered index-linkedannuity (RILA) products and a stochastic analysis of market risks.

Description: A discussion of the theory underlying risk neutral investment scenarios

Description: Target volatility, as an investment strategy, has been used by many funds not only as a way to smooth return but also as a way to manage risks of the VA guarantees. Contrary to existing research which favors volatility targeting over fixed allocation, this article shows that because of the existence of market jump risk, target volatility strategy does not necessarily offer an improved risk profile for VA writers. Further, target volatility coupled with leveraging can significantly increase tail risk for insurance companies.

Description: This article explains why stochastic modeling is becoming more pervasive, and describes a specific stochastic application with metrics to measure results.

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: This article is based on an excerpt from a Milliman Research Report on universal life insurance with secondary guarantees, ULSG. It discusses stochastic profit analysis and the impact of investment volatility of two common variants of ULSGs - level specified premium and single-fund shadow account designs.

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: Discusses the interactions between dynamic lapses and interest rates in stochastic modeling for variable annuities.