Wednesday, August 01, 2007

 

Actuaries Adopt New Risk-Modeling Technologies

If one were to attempt to identify a core of conservatism in the traditionally conservative business of life insurance, one probably would point to the assumptions built into the formulaic statutory accounting by which insurers have demonstrated their ability to cover the risks they assume.

The conservatism of those assumptions imparted a certain financial solidity to the industry, and its tendency to cause insurers to err on the side of overpricing was easily reconciled within the industry's long-standing mutual company system: When end-of-year accounting revealed that premium had been overpriced, carriers could simply send their policyholders higher dividends.

Actuaries Adopt New Risk-Modeling Technologies
Source: Tech Web

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