Essay About Insurance Company And Policy Information

Actuarial Case
Actuarial Case
The reserving process happened after a policy is soldIt is calculating how much money we need to hold in order to be able to pay off our liabilities in the future, As a insurance company – the reserve is a huge portion of insurance company balance sheet, and is very important because how much reserve we hold has a large impact on the company’s incomeHolding too much is not good for our income, holding too low and we risk not having enough to pay policyholdersThe role of us in calculating the reserve is to make sure the methodology is correct and all risks are accounted for, fits with regulationsActuarial reserve is calculated on a similar idea, based on previous experience to determine how much money to set asideFirst thing is to obtain the policy information we need, policy holder information, and product informationThen to determine how we project the liabilities, we need to use assumptions such as mortality rate, interest rate…etc, this information usually comes from our past experiencesAfterwards we need to use these information to project future cashflows, at John Hancock this is usually done through modeling in AXISAt John Hancock, most of the calculations for reserves are done in GGY AXISPolicy information, such as details of the product, and actuarial assumptions are input and out comes the reserve numbersWe do this for 4 accounting basis, each one follows different calculation methodologiesAn actuaries job is to review the numbers coming out of AXIS to see if they are reasonable, and book the reserves for the company