Lesson Tag: Insurance Revenue Account & Profit Modelling

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Photo by Tom Ramalho on Unsplash As what we have learned from the previous version, we have performed calculations on a single set of assumptions. However, such approach may not be able to provide adequate understanding to the stakeholders on the risks inherited in the newly priced products or existing book of business. Actuaries usually perform stress testing to examine the impacts on profitability under unfavorable…

By referring to the templates provided in Lesson 1, the ultimate mortality rates used in the cash flow projections are manually input from NCIB2020 (N-Acturial Combodian Insured-Lives Base). This is an example of common practices used by many valuation actuaries, which derive the best estimate (“BE”) mortality rates from published standard mortality tables. Even though valuation actuaries perform mortality studies on the insurance companies’ policies,…

In the beginner course, Introduction to Cash Flow Modelling, we learned to calculate benefit reserves – i.e. APV of future claim outgo – APV of future premium income. Reserves are unique to insurance business, which are generally not found in other businesses. We use different methods to calculate reserves for short term and long term insurance products. For short term products (e.g. yearly renewable term…

Photo by Anthony Esau on Unsplash Apart from claims and commissions, actuaries also incorporate margins in the gross premiums to cover operating expenses of insurance companies. Some operating expenses are similar to other business, such as: Building rental Furniture & equipment Employee remuneration IT systems On the other hand, some operating expenses are unique to insurance companies, relating to the nature of the business. Among…

Photo by krakenimages on Unsplash Many of us may hear about the conventional wisdom on insurance, i.e. “insurance is sold, but not bought“. To reach their potential customers, insurance companies heavily rely on their intermediaries to distribute their insurance products. Among the common insurance intermediaries are: Career agents – A full-time commissioned salesperson who works out of an insurance company’s field office, holds an agent…

Actuaries working in insurance companies perform analysis on insurance products. Among studies they perform to understand companies’ portfolio better, many of the studies involve projecting future insurance cash flows, either from the in force policies or projected new business. Hence, it is important for actuaries to have versatile actuarial models that allow them to perform complex calculations. Although most actuaries use actuarial software, such as…