Calculate premiums for long-term life and health insurance and annuity contracts based on a specified profit objective.
Free SOA Exam ALTAM (Advanced Long-Term Actuarial Mathematics) lesson in Profit Analysis. 13 min read, ~1,902 words.
Profit vector: end-of-year cash flow per policy in force at start. Profit signature:, and for; discount the signature, not the vector. Profit vector formula:, with reserves and premiums accumulated at the earned rate. NPV at risk discount rate:, where. Set NPV equal to the target and solve for.
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What this lesson covers
- Content
- Example 1
- Example 2
- Common Mistakes
- Check Your Understanding
- Exam Shortcuts
Learning objectives
- 4d
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