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Posts feedCountdown to unisex pricing
In just over one year's time, insurers throughout the European Union will be prohibited from using a person's gender to price insurance risks.
Lost in translation (reprise)
Late last year I drew up a table of actuarial terms and their translation for statisticians. I had thought that it was a uniquely actuarial trait to use different names compared to other disciplines. It turns out that statisticians are almost as guilty.
Dealing with missing data
In an earlier post we looked at how to create a proxy for ill-health early retirements based on age at commencement. This is an example of dealing with missing data — we infer a useful proxy to replace the lost or missing health status at retirement.
Pension-fund socialism
In an earlier posting we looked at several examples where a pension scheme dominates the picture of the company's finances and value.
Special assignment
We talked previously about the use of user-defined validation rules to clean up specific data artefacts you sometimes find in portfolio data. One question came up recently about modelling bespoke benefit bands, and this can also benefit from user-defined rules.
Recurrent problem
Actuarial work involves calculating the present value of future liabilities. In the case of pension funds and annuity portfolios, this means valuing future pension payments. This typically involves calculating a lot of annuity factors, often using spreadsheets.
Risk and models under Solvency II
Insurers need to have internal models for their major risks. Indeed, both the Individual Capital Assessment (ICA) regime in the UK and the pending Solvency II rules in the EU demand that insurers have good models for their risks.
Everything counts in large amounts
Models for projecting mortality are typically built using information on lives with deaths by age and gender. However, this ignores an important risk factor for longevity, namely socio-economic group. For annuity and pension reserving, therefore, it would be helpful to use such information when building stochastic projection models.
Summary judgement
In previous posts we have looked at problems with the quality and reliability of cause-of-death data and a list of hurdles for mortality projections based on such data. One other issue is that of detail.
Sense and sensitivity
Annuities are a good example of the cornerstone of actuarial work: discounting future probabilities of payment to allow for the time value of money. Low interest rates have had major consequences for savers looking for income in retirement, but they are also one reason behind renewed actuarial focus on longevity in recent years.