IFoA SP9 case studies
IFoA SP9 · Put your knowledge to work in context.
SP9 - Specialist Principles: Enterprise Risk Management is one of the Specialist Principles subjects in the Institute and Faculty of Actuaries (IFoA) professional qualification, the stage that sits between the Core Principles subjects and the Specialist Advanced subjects that lead to Fellowship. It is aimed at candidates who already have a grounding in actuarial risk concepts and who want to work - or already work - in risk, capital, regulatory reporting, model governance or consultancy, where the ability to reason about risk across an entire organisation matters more than any single technical calculation. The IFoA SP9 case studies are 5 cases and about 2,726 words.
1Catastrophe Aggregate Limit Exception in a Growth Push
Northbridge Specialty Insurance writes coastal US property catastrophe cover. Its board-approved risk appetite states that the 1-in-200 aggregate net probable maximum loss (PML) must not exceed 85% of available capital, with a hard ceiling of 95% requiring an explicit board risk committee exception.
653 words, about 3 min2Longevity Model Validation and the Use Test
Helios Life Re's internal model prices and hedges longevity swaps and determines economic capital for its annuity book. The longevity module uses a two-factor CBD stochastic mortality model calibrated to 12 years of national population data, with an expert-judgement overlay for cohort effects.
536 words, about 3 min3Incentive-Driven Mis-Selling in a Bancassurance Channel
Meridian Bank Assurance sells payment protection insurance through branch staff of its parent bank. In the last financial year, complaints rose 40% year on year, 22% of policies were cancelled within the first three months, and an internal compliance review found that 15% of reviewed sales files lacked evidence that affordability and suitability had been discussed.
511 words, about 3 min4Dividend Upstreaming versus Local Solvency
Alpha Group has a UK life subsidiary, Alpha UK, and a Bermudan reinsurance affiliate, Alpha Re. Alpha UK's Solvency II ratio is 138%, below the board's 145% operating target but above the regulatory capital requirement of 100%.
522 words, about 3 min5AI Underwriting and Parametric Flood Cover
Arden Mutual is considering entering parametric flood cover for UK SMEs. Its machine-learning pricing model uses eight years of claims data, satellite imagery and a gradient-boosted algorithm; the validation team cannot fully explain the model's drivers, and the data window excludes any major inland flood.
504 words, about 3 min