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Old 06-22-2018, 12:03 PM
Squeenasaurus Squeenasaurus is offline
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Question Actuarial Modelling Projects

Hello all,

I am a student who just started working this year at a life insurance company on our corporate modeling team. I have some general questions I was hoping some actuaries with modeling experience could answer.

As all insurance companies do, we run our corporate modeling projects. I am curious about these projects and what they are. I've asked my co-workers for their explanations so I have a general understanding about most of them, but I want to turn to you to see if anyone else can give their insight too. I'm really only looking for high-level, ELI5 answers (maybe not 5, more like a 22 year old actuarial student).

The projects in question are ALM, CFT, Plan, Financial Forecasting, DAC Recoverability, LRT, and Modified Duration Testing. There's more but we'll start with these for now. I would appreciate it a ton if anyone could take some time to provide their explanation of these such as how we calculate the projections, key metrics, what their purpose is, any kind of background, etc.

Thanks!
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Old 06-22-2018, 12:21 PM
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Originally Posted by Squeenasaurus View Post
The projects in question are ALM, CFT, Plan, Financial Forecasting, DAC Recoverability, LRT, and Modified Duration Testing. There's more but we'll start with these for now. I would appreciate it a ton if anyone could take some time to provide their explanation of these such as how we calculate the projections, key metrics, what their purpose is, any kind of background, etc.

Thanks!
Focusing first on "what their purpose is"

I'm surprised by several items on your list. I would expect your fellow modelers to be able to explain the following ones: ALM, CFT, Plan, Financial Forecasting, DAC Recoverability, LRT

Second, you are not going to get much detail on: how we calculate the projections, key metrics,
because this information depends on the individual company and disclosing it may either give away proprietary information or run afoul of anti-trust rules.

So - good luck on your questions, but I think you are not likely to learn much here.
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Old 06-22-2018, 12:31 PM
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Focusing first on "what their purpose is"

I'm surprised by several items on your list. I would expect your fellow modelers to be able to explain the following ones: ALM, CFT, Plan, Financial Forecasting, DAC Recoverability, LRT

Second, you are not going to get much detail on: how we calculate the projections, key metrics,
because this information depends on the individual company and disclosing it may either give away proprietary information or run afoul of anti-trust rules.

So - good luck on your questions, but I think you are not likely to learn much here.
Thanks for the response. I have had these explained to me but I just wanted to get another point of view. I also understand I can google a lot of this stuff but I like actuaries better.
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Old 06-22-2018, 08:26 PM
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I would expect your fellow modelers to be able to explain the following ones: ALM, CFT, Plan, Financial Forecasting, DAC Recoverability, LRT
That is overly optimistic, especially if they are using proprietary software to do it.

-Riley
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Old 06-22-2018, 09:43 PM
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That is overly optimistic, especially if they are using proprietary software to do it.

-Riley
Let's agree to disagree. I was thinking about my experience with actuaries who develop and use models. I think you have a different data source.

Also, you left out the introductory comment, where I indicated I was focusing on the PURPOSE of those models.
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Old 07-14-2018, 05:45 AM
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That is overly optimistic, especially if they are using proprietary software to do it.

-Riley
Since the individual in question is looking for an ELI5 explanation, I think JMO's comment is reasonable. Coming up with the exact formula and recalculating the model results - I agree is optimistic, but in an ideal world, someone should be able to do that.
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