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Dec 01, 2024
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MATH 4560 - Life Contingencies
An introduction to the mathematical theory of contingencies, concentrating on models for the actuarial present value of a future set of payments contingent on some random event(s), with applications to life insurance, life annuities, benefit reserves. It includes material from examinations by the Society of Actuaries and the Casualty Actuarial Society.
Requisites: MATH 4550
Credit Hours: 3
Repeat/Retake Information: May be retaken two times excluding withdrawals, but only last course taken counts.
Lecture/Lab Hours: 3.0 lecture
Grades: Eligible Grades: A-F,WP,WF,WN,FN,AU,I
Learning Outcomes: - Students will be able to work with key concepts concerning parametric and non-parametric models including single life, multiple life and multiple decrements.
- Students will be able to perform calculations on present value random variables associated with benefits and expenses for different survival models.
- Students will be able to calculate and interpret probabilities, means, variances and percentiles for the present value random variable.
- Students will be able to calculate the effect of changes in underlying assumptions such as mortality and interest on the present value random variable.
- Students will be able to use and explain premium calculation methodologies.
- Students will be able to calculate and interpret probabilities, means, variances and percentiles of random variables associated with premiums.
- Students will be able to calculate premiums based on the equivalence principle, the portfolio percentile premium principle and profit testing.
- Students will be able to calculate and interpret probabilities, means, variances and percentiles for random variables associated with reserves.
- Students will understand premium reserves for insurances and annuities for survival models and different premium types, including net premium, modified premium, gross premium and expense.
- Students will be able to calculate and interpret common profit measures such as expected profit, actual profit and break-even year.
- Students will be able to apply survival models, different types of premiums and reserves calculations to pension plans and retirement benefits.
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