Actuarial Mathematics for Modelling (CM1) Exam
Learn interest rate theory and the mathematics of insurance contracts that depend on survival and other uncertain events.
Learning Objectives
5 objectivesApply the theory of interest rates, including the time value of money, annuity functions and the term structure of interest rates.
Use equations of value to solve practical problems and appraise projects.
Describe and use assurance and annuity contracts on one and two lives, and multiple-decrement models.
Calculate gross premiums and reserves, and describe death strain and mortality profit.
Project cashflows for whole life, endowment and term assurances, and establish non-unit reserves for unit-linked contracts.
Programme Outline
4 topicsTheory of Interest Rates
Interest rates in different time periods, compound interest and discounting, inflation, annuity and accumulation functions, the term structure of interest rates, and duration, convexity and immunisation.
Equation of Value and Its Applications
The equation of value, its use in practical problems, and cashflow techniques in project appraisal.
Decrement and Multiple Life Models
Assurance and annuity contracts, their means and variances, two-life functions, and cashflows contingent on multiple transition or decrement events.
Pricing and Reserving
The gross future loss random variable, gross premiums and reserves, death strain and mortality profit, cashflow projection, and non-unit reserves for unit-linked contracts.
Hands-On Resources
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