ALTAM or ASTAM Exam
Advanced long-term and short-term tracks
The ALTAM or ASTAM exam deepens the corresponding track. For ALTAM, focus on multiple decrements, pension and insurance cash flows, premium reserves, gross premiums, expense loads, and profit testing. For ASTAM, focus on frequency and severity models, aggregate loss distributions, credibility, reinsurance, ruin theory, and short-term insurance risk. In both tracks, identify the random variable, its support, and the payment or loss timing before selecting a formula.
Modeling traps
Common traps include ignoring deductibles and policy limits, mixing per-loss and per-payment variables, and applying individual risk models when the collective risk model is intended. In credibility, check whether the model is limited-fluctuation or greatest-accuracy and whether the complement is relevant. In ruin theory, distinguish the adjustment coefficient from the probability of ruin. In reserves, do not omit expenses or taxes when the question asks for gross values.
Worked rule
For a ground-up loss X with deductible d and limit L, the insurer payment is min(max(X-d,0),L). The expected payment is E[(X-d)+] minus E[(X-d-L)+]. This stop-loss identity prevents double counting. If X is exponential with mean 1000, d = 200, and L = 500, integrate the survival function over the payment layer. The trap is subtracting the deductible twice or ignoring the limit.