IAI SA2 case studies
IAI SA2 · Put your knowledge to work in context.
SA2 (Life Insurance) is the specialist-principles subject in the Institute and Faculty of Actuaries' Fellowship pathway. It is aimed at actuaries who already hold the core technical and core applications subjects and now want to apply that toolkit to a life insurer end to end: products and regulation, financial reporting, pricing and contract design, valuation and solvency, asset-liability management, risk and capital management, mergers and restructuring, corporate strategy, and the professional and ethical judgements that run through all of them. The IAI SA2 case studies are 5 cases and about 4,513 words.
1Guaranteed single-premium endowment through bancassurance
A mid-sized Indian life insurer is deciding whether to launch a non-participating single-premium endowment through a bancassurance partner. The plan pays a guaranteed maturity benefit of ₹1,150,000 after 15 years on a single premium of ₹600,000, with a death benefit of 105% of premium.
939 words, about 5 min2Surrender values and bonus declaration in a with-profits cohort
A mutual life insurer's with-profits fund holds assets of ₹4,200 crore against a realistic policyholder liability of ₹4,050 crore. For a cohort of 42,000 twenty-year endowment policies written in 2009, the asset share is ₹3.6 lakh per policy, while the guaranteed sum assured plus declared vested bonuses is ₹4.1 lakh.
916 words, about 5 min3Duration gap in a large immediate annuity portfolio
A life insurer has written ₹8,000 crore of immediate annuities over five years. The liability duration is 12.4 years, while the backing fixed-income assets have a duration of 8.1 years.
904 words, about 5 min4Acquiring a closed book with stale assumptions
A listed insurer is bidding for a smaller company whose only remaining business is a closed book of 85,000 non-participating endowment policies with an average outstanding term of nine years, plus 12,000 deferred annuities now in payout. The seller's embedded value is ₹640 crore, based on an 11% risk discount rate, a 7.0% earned rate, and a lapse assumption of 8% that has not been updated for three years.
880 words, about 4 min5Pressure on the Appointed Actuary at valuation sign-off
The Appointed Actuary of a mid-sized insurer is finalising the statutory valuation. The chief executive asks him to reduce the incurred-but-not-reported reserve and to adopt a mortality table with 6% lower qx for the term portfolio, arguing that recent reinsurance experience supports it.
874 words, about 4 min