IFoA SP1 case studies

IFoA SP1 · Put your knowledge to work in context.

SP1 (Specialist Principles 1) is a Specialist Principles examination within the Institute and Faculty of Actuaries (IFoA) qualification pathway, taken by candidates who have completed the Core Principles and Core Practice stages and are moving into specialist practice. It is aimed at trainee and qualified actuaries who need a broad, applied understanding of how actuarial techniques are used across the main practice areas rather than deep expertise in a single one. The IFoA SP1 case studies are 5 cases and about 3,286 words.

Repricing a loss-making age band in individual PMI

You are the chief actuary of a UK private medical insurance (PMI) provider. The individual book has 18,500 policyholders, mostly aged 45-70, and is community-rated in five-year age bands.

637 words, about 3 min 2

Bonus declaration and estate distribution in a closed with-profits fund

You are the appointed actuary of a closed with-profits life fund with assets of £2.1bn and total asset shares of £1.85bn. The fund has 40,000 policies, mostly 20-year endowment policies maturing over the next six years, plus 8,000 annuities in payment.

678 words, about 3 min 3

Reserve adequacy and an expansion proposal in UK motor

You are the reserving actuary for a UK motor insurer writing £420m of premium: 70% private car and 30% commercial fleet. The 2022 and 2023 accident years have developed adversely by £38m and £52m respectively, almost entirely on bodily injury claims.

695 words, about 3 min 4

Holding downgraded corporate bonds in an annuity portfolio

You manage the assets backing a £3.2bn portfolio of level-payment immediate annuities with a liability duration of 11 years. The portfolio is 55% corporate bonds (average rating A-, average spread 110bp), 30% gilts and 15% infrastructure debt.

645 words, about 3 min 5

Partial buy-in versus a long recovery plan for a weak sponsor

You advise the trustees of a £1.375bn defined benefit scheme with assets of £1.265bn, a funding level of 92% on a gilts-plus basis and a deficit of £110m. The sponsor is a mid-sized manufacturer with EBITDA of £140m and net debt of 3.2 times EBITDA; the next triennial valuation is due in 14 months.

631 words, about 3 min