Describe major categories of assumptions used by actuaries

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Reference no: EM133465666

QUESTION 1

Describe the three major categories of assumptions used by actuaries (economic, demographic, and experience-based) as they relate to group life claim cost projections.

In addition to describing the three major categories of assumptions, also answer the following questions:

• Provide two specific assumption types within each category that are material to forming claim costs for a group life insurer?

• What are some potential consequences of getting these assumptions wrong?

• Based on the example assumptions you have selected, which set of assumptions might be interrelated, why are they interrelated, and what challenges do their interrelationships create in setting these assumptions?

QUESTION 2

In the form of an outline summary to a presentation, describe:

• Determine the most important assumption from each of the three assumption categories. Provide an explanation.

• Rank the three assumptions in order of most critical to least critical Justify your ranking.

• Determine an appropriate sensitivity test for each of the three assumptions.

Reference no: EM133465666

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