Life Insurance Models 2

This subject is not offered in 2014.

Estimated total time commitment of 120 hours per semester

ACTL90006 Life Insurance Models I

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Students should be competent in the use of Excel.

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For the purposes of considering requests for Reasonable Adjustments under the Disability Standards for Education (Cwth 2005), and Students Experiencing Academic Disadvantage Policy, academic requirements for this subject are articulated in the Subject Description, Subject Objectives, Generic Skills and Assessment Requirements for this entry.

The University is dedicated to provide support to those with special requirements. Further details on the disability support scheme can be found at the Disability Liaison Unit website: http://www.services.unimelb.edu.au/disability/

This subject provides the groundwork for the capstone subject Life Contingencies. It provides students with a framework for actuarial modelling, and introduces the key ideas of stochastic processes as they apply in actuarial science. The subject also expands students’ existing knowledge of mortality modelling by introducing the important ideas of mortality variation in a population and selection effects, which have implications for the applied topic of pricing life insurance products.

On successful completion of this subject a student should be able to:

• Describe how to test crude estimates for consistency with a standard table or a set of graduated estimates, and describe the process of graduation;
• Describe the principles of actuarial modelling;
• Describe the general principles of stochastic processes, and their classification into different types;
• Define a Markov chain and apply Markov chains in actuarial problems;
• Describe different forms of selection in insurance.
• Develop a knowledge of actuarial modeling and the application of stochastic processes in insurance settings.

• An assignment of up to 1,000 words (10%)
• One hour mid-semester test (20%)
• Two hour end of semester exam (70%)

You will be advised of prescribed texts by your lecturer.

This subject is not available as a breadth subject.

High level of development:

• Written communication;
• Problem solving;
• Statistical reasoning;
• Application of theory to practice;
• Synthesis of data and other information.