Description: This article discusses specific challenges in model risk management, and practical solutions to those challenges, which are critical to building a model risk management capability. Through our experience working with insurers to build a model risk management capability, we have identified four areas in need of special attention: model definition, model governance and policy, model validation, model documentation. Addressing the challenges within these areas early on can help prevent more complex problems from arising later in a model's life cycle.

Description: This paper introduces a rich stochastic modeling framework for understanding risks in multiple-decrement contracts. The example in the paper is a 20-year Term insurance contract. Not only are mortality and lapsation considered stochastic, but the parameters governing them are. For example, mortality risk is composed of four risk elements, including error generated in the underwriting process, volatility around the best estimate, catastrophic events that impact mortality, and the trend in mortality improvement or deterioration. When stochastically modeled, the relative contribution and risk profile of each risk element can be evaluated. Generating stochastic mortality results provides a distribution of results that an organization faces and the severity and incidence of the tail events.

Description: Feature article discussing the possibility of the LIBOR rate ceasing to exist in 2021 at what that would mean for insurance companies.

Description: Full version of Risk Management, December 2006, Issue No. 9.

Description: Examines the application of stochastic modeling techniques to non-market risks facing the life insurance industry. The focus is the modeling and quantification of mortality and lapse risks with consideration for the impact reinsurance has on these risks. To mitigate the impact of financial risks, the research assumes a 20–year term life insurance product.

Description: This article discusses the results of EY insurance risk analysts interviewingchief risk officers and senior risk executives from more than 20 North American insurance companies.

Description: This report is jointly sponsored by LIMRA International and the Society of Actuaries in collaboration with Ernst & Young. It describes Substandard Annuities and discusses the market opportunity for them, underwriting, the associated risk management issues, and the issues companies need to address when competing in the substandard annuity market. It discusses the single premium immediate annuity, SPIA, in relation to substandard annuities and the differences between the products.