Description: This is a continuation of a discussion about the the theoretically correct treatment of the credit put the policyholder writes when purchasing an insurance contract.

Description: Enterprise risk management ERM is for the measurement and the management of all significant risks of the business holistically irrespective of types and sources. The study offers significant advances in the current debate on the performance of enterprise risk management, in particular, minimizing the existing gap between the academic understanding and practitioners’ experience on the topic.

Description: This paper provides a novel approach to the valuation of the market value of economic surplus that is stable and immune from “market noise”.

Description: This paper uses economic principles to analyze alternative recognition schemes for end-of-period retirement plan liabilities the candidates, using U.S. nomenclature, are the vested benefit obligation VBO, the accumulated benefit obligation ABO and the projected benefit obligation PBO.

Description: Spreadsheet with documentation for exhibits to the May 2007 report: The Potential Impact of Pandemic Influenza on the U.S. Life insurance Industry

Description: The purpose of the article is to highlight how a person or organization can excel in both a highly-competitive expert-driven environment and one where the environment is less so. One should focus on what can be done well and delegate the remaining tasks to those who are better at performing them. One should understand the environment they are operating in, how it impacts them, and how it may change through time. The principles have application to investment management, investment performance, organizational performance, business development, career progression and economics.

Description: Actuaries have traditionally recognized the links between risk and value, and in recent years have begun to incorporate aspects of modern financial economic theory into their traditional valuation and risk management approaches. As a result, there has been an increasing trend in the incorporation of explicit market-based risk adjustments into valuations, whether for internal or external purposes. The use of market-based metrics to reflect risk in valuations is becoming increasingly widespread—in fact, major external standard setters, including FASB, IASB, CFO Forum and the various parties setting standards for Solvency II, have prescribed varying levels of use of market-based metrics to measure risk in valuations. Presented at 2010 Enterprise Risk Management Symposium, Society of Actuaries, April 12-15, 2010.

Description: Management's goal is to continuously optimize the economic value of the firm, subject to regulatory constraints, with the use of financial valuation of the firm’s balance sheet. Both the assets and liabilities can be perceived as derivative securities. This chapter discusses a variety of financial economics issues with this common theme. From Asset-Liability Integration, M-FI02-1.

Description: Increasing uncertainties and volatility in financial as well as real goods markets increasingly reveal that controlling systems based on deterministic and pseudo-exact values are insufficiently eligible to manage the business activities. This raises the question how management systems can be modified to generate the adequate management impulses in volatile periods. Risk management deals from identifying, evaluating and aggregating chances and risks, which again determine the potential fluctuation range of relevant performance indicators. Everyday corporate life shows that risk management is considered important; but the corresponding processes to identify, evaluate and report chances and risks are seldom part of established decision criteria. This “paradox” lets assume that risks are managed in various differing and unsystematic ways. The combination of traditional controlling methods and risk management is not primarily a methodological challenge. The behavior of the whole organization, practiced over a long-year period, has to be transferred into a new corporate culture of transparent dealing with chances and risks. This paper describes the necessary change management process, which has to come along with necessary methodological modifications.

Description: Exploration of sources of volatility in retiree health valuations, noting how volatility arises and might be mitigated, with discussion of valuation parameters more problematic for retiree health benefits than for pensions. Three significant influences on retiree health valuation volatility are covered-- changes in benefit level, fluctuations in cost level, and alterations in eligibility for, or duration of, benefit – and attention focused on the last two. Specific conclusions result in recommendations, which are supported by practical examples contrasting volatile measurement results with those likely from the recommended practices. Theoretical discussion includes health claim variation, health trend usage, financial economics, option pricing, discount rates, and deterministic vs. stochastic modeling.