Introductory description

This module runs in Term 2 and is available for students on a course where it is a listed option and as an Unusual Option to students who have completed the prerequisite modules.

Pre-requisites: ST334 Actuarial Methods. It is recommended to take ST338 in parallel with ST345.

Results from this module may be partly used to determine exemption eligibility in the Institute and Faculty of Actuaries (IFoA) module CM1. (Independent application with the IFoA may be required to receive the exemption.)

Module web page

Module aims

Outline syllabus

This is an indicative module outline only to give an indication of the sort of topics that may be covered. Actual sessions held may differ.

• Simple assurance and annuities, and their evaluation
• Net premiums and reserves
• Variable benefits and annuities
• Gross premiums and reserves for fixed and variable benefit contracts
• Annuities and assurances involving two lives
• Multiple state models, including multiple decrements
• Cashflow projection techniques
• Factors affecting mortality; selection and standardisation

Learning outcomes

By the end of the module, students should be able to:

• Define the actuarial symbols related to assurance and annuity contracts, understand their interrelationships, and perform relevant calculations.
• Understand and use life tables for calculations such as expected values and variances for simple contracts.
• Describe and calculate net and gross premiums and premium reserves for various assurance and annuity contracts.
• Describe and use methods to estimate cashflows for contracts involving two lives or multiple states, including the use of multiple decrement models.
• Describe and use methods for assessing profitability and for pricing contracts.
• Explain heterogeneity in populations, and simple methods to deal with heterogeneity.

Indicative reading list

Core Reading for the 2018 exams - CT5 Contingencies. Institute and Faculty of Actuaries (2018) [Available for purchase from the Undergraduate Support Office].;
Formulae and Tables for Examinations of the Faculty of Actuaries and the Institute of Actuaries. Institute of Actuaries and Faculty of Actuaries (2002) [Available on loan from the Undergraduate Support Office].;
Dickson, D.C., Hardy, M., Hardy, M.R. and Waters, H.R.. Actuarial mathematics for life contingent risks. Cambridge University Press, Second edition (2013).;
Dickson, D.C., Hardy, M., Hardy, M.R. and Waters, H.R.. Solutions manual for actuarial mathematics for life contingent risks. Cambridge University Press, Second edition (2013).; Turnbull, C.. A History of British Actuarial Thought. Palgrave Macmillan (2017).

View reading list on Talis Aspire

Subject specific skills

TBC

Transferable skills

TBC