Finance and Financial Management Commons^™

A Critique Of Defined Contribution Plans Using A Simulation Approach, David M. Knox

Journal of Actuarial Practice (1993–2006)

During the 1980s there was a trend in many countries away from defined benefit plans toward defined contribution plans. This development means that the individual member bears the full investment risk in the preretirement period and the annuity rate risk at retirement, as no pension benefit (expressed as a percentage of salary) is provided. This paper, through the use of a stochastic model for both inflation and a range of investment returns, analyses the distribution of retirement incomes that will be produced from a defined contribution plan. The impacts of changing entry and exit ages, different investment strategies, alternative career …

Discussion Of Mark J. Browne's "The Definition Of Insurance: Implications For A Health Insurance Demand Model", Charles Fuhrer

Journal of Actuarial Practice (1993–2006)

No abstract provided.

Estimating The Effect Of Statutory Changes On Insured Casualty Losses Using Generalized Indicator Variables, Ruy A. Cardoso

Journal of Actuarial Practice (1993–2006)

Techniques for estimating future insured losses in casualty insurance typically assume consistency in the insurance environment over time. Statutory changes, however, can create sharp discontinuities in the loss-generating process, complicating the estimation of those losses. Using indicator variables and dummy variables allows for quantification of the effect of such discontinuities. Three examples from private passenger automobile insurance are presented to illustrate how these variables can be used.

The Definition Of Insurance: Implications For A Health Insurance Demand Model, Mark J. Browne

Journal of Actuarial Practice (1993–2006)

This paper uses data from the 1977-78 National Medical Care Expenditures Survey to evaluate five different measures of insurance: a family's expected out-of-pocket payment for medical care, the expected value of the indemnity (fee-for-service) benefits from an insurance policy for a family, the percentage of the expected loss that the insured pays, the policy premium, and the policy limit of coverage. The study provides information that can help us understand whose insurance coverage will change significantly as a result of health care reform. For example, it shows that those with low income (such as minorities, families headed by females, and …

On The Equivalence Of The Loss Ratio And Pure Premium Methods Of Determining Property And Casualty Rating Relativities, Robert L. Brown

Journal of Actuarial Practice (1993–2006)

There are two distinct stages in the property and casualty ratemaking process. First, there is the portfolio average rate change. Second, there is the adjustment of classification relativities. It is well known that the loss ratio and pure premium (also called the loss cost) methods are algebraically equivalent in the stage called the portfolio average rate change. This paper reviews the proof of this equivalence. Further, it is proved algebraically that the loss ratio and pure premium methods are also equivalent in calculating classification relativities (or differentials) if certain data requirements can be met. A short numerical example of this …

The Process Of Pension Forecasting, Michael Sze

Journal of Actuarial Practice (1993–2006)

This paper explains the process of pension forecasting. It discusses the common purposes and uses of pension forecasts, the major steps involved, and the principal limitations of these forecasts. Some insights into each stage of the forecasting process are provided. Among the stages discussed are: the background research to be performed; the selection of scenario assumptions; shortcuts used in the actual performance of the forecast; review of the forecast results; and communication of the forecast findings.

Discussion Of Patrick Butler's "Cost-Based Pricing Of Individual Automobile Risk Transfer: Car-Mile Exposure Unit Analysis", Ruy A. Cardoso

Journal of Actuarial Practice (1993–2006)

No abstract provided.

Book Reviews, Hoque A. Sharif

Journal of Actuarial Practice (1993–2006)

No abstract provided.

A New Approach To Modeling Excess Mortality, Peter D. England, Steven Haberman

Journal of Actuarial Practice (1993–2006)

This paper describes a complete framework for the statistical modeling of excess mortality, with particular reference to the experience of insured, impaired lives. The principal measure of excess mortality considered is the standardized mortality ratio. The modeling approach, based on the theory of generalized linear models, allows us to build models containing several explanatory variables. The statistical significance of these variables can be tested, and the effect of interactions between the variables can be assessed rigorously. The paper uses data drawn from the extensive, continuing investigation into the mortality of insured, impaired lives conducted by the Prudential Assurance Company (UK). …

Group Insurance, Charles Fuhrer

Journal of Actuarial Practice (1993–2006)

No abstract provided.

On Becoming A Cost Effective Company, Robert D. Shapiro, Barton H. Clennon

Journal of Actuarial Practice (1993–2006)

The 1990s financial services environment requires each life company to identify its distinct capabilities and competitive strengths and to build its future direction from these features. This demands a fundamental rethinking of traditional approaches to planning, organization, and financial management.

Cost-Based Pricing Of Individual Automobile Risk Transfer: Car-Mile Exposure Unit Analysis, Patrick Butler

Journal of Actuarial Practice (1993–2006)

Every mile traveled by a car transfers risk to its insurer. This paper posits that the product of a cents-per-mile rate based on class experience and the miles recorded on the car's odometer appropriately earns prepaid premium while the car is driven. Operation of a practical car-mile system is described briefly. To test the competing idea that driver-record pricing responds to known large differences in risk transfer, a model used to validate claim free discounts is reexamined with the car-mile as the measure of individual cost. Driver-record pricing is found to inflate car-year price-to-cost differences. Consequences of accident rate variability …

Ethical Issues, Helps, And Challenges: Perceptions Of U.S. Actuaries, Therese M. Vaughan, Robert W. Cooper, Garry L. Frank

Journal of Actuarial Practice (1993–2006)

This paper reports the findings of a survey of Fellows of the Casualty Actuarial Society (FCAS) to determine their perceptions of the key ethical issues and dilemmas facing the industry today and the factors they view as most helpful and challenging in resolving these dilemmas. The responses are compared to a previous survey of Fellows of the Society of Actuaries (FSA). The study finds that FSAs and FCASs tend to rank key ethical issues similarly and that both groups of actuaries tend to look first to their own personal values, second to certain factors in their business environment, and last …

Managing The Relative Volumes Of Participating And Nonparticipating Business In A Mutual Life Company, Robert G. Chadburn

Journal of Actuarial Practice (1993–2006)

Management decisions of a mutual life company involving the amounts and relative proportions of participating (with profits) and nonparticipating (without profits) business and the level of expenses are examined in relation to their effect on participating policyholders' returns. A particular expense ratio is defined that plays a key role in a framework for making such decisions. The sensitivity of participating policy returns to changes in each factor are analyzed. Companies with expense ratios (as defined) of less than 2 are shown to prefer a different strategy from companies with higher ratios. There is an incomplete tendency for the ratio to …

Life Insurance Applications Of Recursive Formulas, Timothy L. Giles

Journal of Actuarial Practice (1993–2006)

This paper discusses several practical applications of recursive formulas:

a) Traditional whole life-As an introduction, the well-known relationship between successive terminal reserves is reviewed. Recursive formulas are developed to calculate the reserves and the premiums;

b) Universal life-Recursive formulas are used both for the calculation of target premiums and reserves. Consideration is given to the TEFRA corridor;

c) Paid-up rider-A participating single premium rider that provides a level death benefit can be devised using an inherent one year term benefit. Recursive functions are used to determine the premium that precisely matures the rider.

Because the APL programming language is particularly …

Journal Of Actuarial Practice, Volume 1, No.1, 1993, Colin Ramsay , Editor

Journal of Actuarial Practice (1993–2006)

ARTICLES

Global Social Security: How the Rules are Changing in Certain Countries • Robert J. Myers

On Becoming a Cost Effective Company • Robert D. Shapiro and Barton H. Clennon

The Process of Pension Forecasting • Michael Sze

Cost-Based Pricing of Individual Automobile Risk Transfer: Car-Mile Exposure Unit Analysis • Patrick Butler

Discussion • Ruy A. Cardoso & Richard G. WolI & Patrick Butler's Reply

A New Approach to Modeling Excess Mortality • Peter D. England and Steven Haberman

The Small Plan Audit Program: The Opinions of the Court • Arnold F. Shapiro

BOOK REVIEWS

A. Hoque Sharif reviews "Options …

Factors Affecting Commitment Among Graduate Nurses In Cairo, Cheherezade Ghazi

Archived Theses and Dissertations

No abstract provided.

Determinants Of Accounting Policy For Identifiable Intangible Assets, Yuan Chew

Theses : Honours

This research replicates with modifications the previous study by Coombes, Otto and Stokes (1993) which examines the economic determinants of the amortisation of identifiable intangible assets (lIAs). The study focuses on the published consolidated annual reports of a sample of top 150 listed Australian companies, ranked by market capitalisation, as at June 1989, over the period 1989 to 1990, whereas the previous study by Coombes et al. (1993) concentrates on the top 150 listed Australian companies, ranked by market capitalisation, as at 30 June, 1988, over the period 1986 to 1989. The empirical evidence of the present research using contracting …

A Case Study Examining Factors Influencing Loan Pricing Within The R&I Bank, Yawar Zoeb

Theses : Honours

This paper sets out to examine the influence of variables that affect the pricing of commercial loans within the context of the R&I Bank. This will be achieved by collecting financial information on past business loan pricing decisions from a specific R&I Bank branch selected. The information so collected would be analysed from the viewpoint of understanding the pricing of risk. Of specific interest is the examination of loans in a branch to find out the distribution of loans across the spread of credit risk premiums. A credit risk premium, also referred to as the interest rate margin (IRM), is …

Correspondence - Quarterly Financial Reports, Wku Board Of Regents

Board of Regents Documents

Correspondence from Thomas Meredith to Regents regarding second quarter financial reports.

Exhibit 1 - Salary Study Documentation, Wku Board Of Regents

Board of Regents Documents

Salary study documentation for the Feb. 4, 1993 meeting

• Salary Study 1/29/1993
• Recommendations Regarding Compensation Increases 2/4/1993
• WKU 1993-94 Budget Information
• Report of the Salary Study Committee
• Lawrence Howard Personal Action Form

Lobbying Activity In The Standards Setting Process: Fasb Statement On Financial Accounting Standards No. 106, "Employers' Accounting For Postretirement Benefits Other Than Pensions", Christine Schalow

Graduate Theses and Dissertations

The purpose of this study is to explain and classify the behavior of corporate managers in the accounting standards setting process as it related to Statement of Financial Accounting Standards No. 106. Evidence from this study provides readers a better understanding of participation of corporate managers in the accounting standards setting process. To accomplish the objective, this study surveyed corporate representatives who responded to the Financial Accounting Standards Board's, February 1989, exposure draft, "Employers' Accounting for Postretirement Benefits Other Than Pensions," (OPEB). A sample of corporations whose representatives did not respond to the OPEB exposure draft, although the corporations did …

No. 120 1992 November

International Journal for Business Education

SIEC Historical Documents

The Effect Of Nonbank Diversification On Bank Holding Company Risk, William K. Templeton, Jacobus T. Severiens

Scholarship and Professional Work - Business

Examines the effect of activity diversification on bank holding company (BHC) risk. Historical background of the BHC; Presentation of the research design and test results; Predictions of the modern portfolio theory; Implications of the study regarding the effect of nonbank diversification on BHC risk.

Some Evidence On The Empirical Significance Of Credit Rationing, Allen N. Berger, Gregory F. Udell

Faculty Publications

This paper examines the credit rationing debate using detailed contract information on over one million commercial bank loans from 1977 to 1988. While commercial loan rates are "Sticky," consistent with rationing, this stickiness varies with loan contract terms in ways that are not predicted by equilibrium credit rationing theory. In addition, the proportion of new loans issued under commitment does not increase significantly when credit markets are tight, despite the fact that borrowers without commitments can be rationed whereas commitment borrowers are contractually insulated from rationing. Overall, the data suggest that equilibrium rationing is not a significant macroeconomic phenomenon.

A Feasibility Study On Consolidating Air Force Cost Reduction Programs, Joseph H. Donohoe, Mark A. Hobson

Theses and Dissertations

This study investigated the possibility of consolidating available manufacturing cost savings programs into one concise effort with common ground rules and regulations. The current manufacturing cost savings program include the Industrial Modernization Incentive Program (IMIP), the Manufacturing Technology Program (MANTECH), and the Value Engineering Program (VE). A literature search revealed that there are problems associated with each of these cost savings programs. A case study was conducted on the B-2 System Program Office's effort to consolidate cost savings programs into one common effort. This case study revealed that there were positive benefits in reducing cost after consolidation. A survey of …

An Analysis Of Contract Cost Overruns And Their Impacts, Brian D. Wilson

Theses and Dissertations

This study examines the tendency of major program DoD contracts, once in an overrun status, to remain in that status and in many cases, further deteriorate. In these times of budgetary constraints, it is important that government program managers and other key decision makers understand the ramifications of contract overruns especially early in a program's life. The overruns on the A-12 program, for instance, could have possibly been predicted much earlier and the program cancellation avoided if only the program manager had understood the implications of significant cost overruns early in the life of the program.

Life-Cycle Costs Of Alternative Icbm Second Stage Designs, Brian D. Joyce, Patrick E. Poppert

Theses and Dissertations

The purpose of this study was twofold. The primary objective of our research was to develop and report life-cycle cost estimates for new second stage ICBM booster designs to Phillips Laboratory. Our second objective (perhaps of equal or greater importance as the first), was to provide the users of these estimates with a taste of what exactly is involved in life-cycle costs, the cost estimating process, and factors that influence these items. Life-cycle cost estimates were requested to supplement separate engineering and research efforts of both Phillips Laboratory and graduate students at the School of Engineering, Air Force Institute of …

The Davis-Bacon Act: Cost Impact On The Air Force, Raymond Carpenter

Theses and Dissertations

This study was performed to determine what cost impact, if any, the Davis-Bacon Act has on the cost of Air Force construction contracts. The Davis- Bacon Act is a federal labor statute requiring the payment of pre-established wages to workers employed under Federally funded construction projects. The research found that contract award prices could be approximately 22% lower if the payment of these wages were not required. This estimate was made based on the results of a survey of bidders competing for award of construction contracts issued by bases within the former Strategic Air Command. Additional findings and survey response …

Cost/Schedule Control Systems Criteria: A Reference Guide To C/Scsc Information, Erik G. Cummings, Kirk A. Schneider

Theses and Dissertations

This thesis effort provides a valuable tool for contract performance measurement (CPM) analysts to use both while attending formalized Cost/Schedule Control Systems Criteria (C/SCSC) training, and while on the job. Research indicated a large amount of written material existed on contract performance measurement and the more specific topic of C/SCSC, yet this information was hidden in a wide array of unindexed professional journals, master's thesis, and texts. Further, while many professions have a reference guide of annotated bibliographies, CPM had none. Through an extensive literature review using several search and retrieval methods, the authors were able to amass a bibliography …