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ACST355 – Contingent Payments 2

2017 – S2 Day

General Information

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Unit convenor and teaching staff Unit convenor and teaching staff Unit convenor and lecturer
Chong It Tan
Contact via Contact via email or iLearn Forum
E4A609
Friday 3-4pm during teaching weeks or by appointment
Lecturer
Sachi Purcal
Contact via Email
E4A615
Tuesdays 1400–1600 during teaching weeks
Chong It Tan
Angela Chow
Credit points Credit points
3
Prerequisites Prerequisites
ACST358
Corequisites Corequisites
Co-badged status Co-badged status
Unit description Unit description
This unit covers the advanced analysis of cash flows dependent on uncertain events. Multiple decrement and multiple state models are considered, and the valuation of benefits and contributions under superannuation plans is examined. Techniques for the valuation of annuity and assurance products involving two lives are developed. Expected cash flow models and profit test models are developed for life insurance products including traditional products and unbundled unit linked contracts. The concepts of pricing and reserving for future contingent liabilities, and the effect of the pricing and reserving basis on the emergence of profit, are considered. Students gaining a grade of credit or higher in both ACST255 and ACST355 are eligible for exemption from subject CT5 of the professional exams of the Institute of Actuaries of Australia.

Important Academic Dates

Information about important academic dates including deadlines for withdrawing from units are available at http://students.mq.edu.au/student_admin/enrolmentguide/academicdates/

Learning Outcomes

  1. Extend the techniques learned in ACST255 to permit the calculation and analysis of cashflows dependent upon the death or survival of either or both of two lives, and cashflows dependent upon a fixed term as well as age.
  2. Describe, develop, apply and analyse methods used to model cashflows contingent upon competing risks; construct and use multiple decrement service tables, and demonstrate understanding of the relationship with associated single decrement tables.
  3. Describe, apply and analyse the technique of discounted emerging costs for use in pricing, reserving and assessing profitability, for superannuation funds and related multiple decrement tables, traditional life insurance contracts and unit linked policies.
  4. Define, describe and illustrate the principal forms of heterogeneity within a population and the ways in which selection can occur; define, calculate and analyse the use of various single figure indices, explain the rationale behind the indices, and explain the advantages and disadvantages of the indices for summarising and comparing actual experience in different scenarios.
  5. Demonstrate the ability to identify key unit concepts and to integrate them to solve and analyse novel problems.

General Assessment Information

 

For all assessments:

  • Assessment criteria for all assessment tasks will be provided on the unit iLearn site.

  • All individual assessment results will be made available under Grades on the website. 

  • It is the responsibility of students to view their marks for each within-session assessment on iLearn within 20 working days of posting. If there are any discrepancies, students must contact the unit convenor immediately. Failure to do so will mean that queries received after the release of final results regarding assessment marks (not including the final exam mark) will not be addressed.

  • In the cases where a disruption to studies application is approved, the student may be offered an alternative assessment or may receive a mark based on the percentage mark achieved by the student in one or more other assessment tasks, at the unit convenor’s discretion.

Assessment Tasks

Name Weighting Hurdle Due
Online Quiz 0% No 23 August
Mid-Semester Exam 20% No 13 September
Assignment 20% No 1 November
Final Examination 60% No University Examination Period

Online Quiz

Due: 23 August
Weighting: 0%

The online quiz will cover Sections 1 to 3. The quiz is due on 23 August (Wednesday of week 4) 11:55pm, to be submitted online via the iLearn site.

Please use the quiz as an indicator of whether you are progressing satisfactorily in the unit. If you are having difficulties, please see the Unit Convenor and consider withdrawing before the census date on Friday of week 4.

 


This Assessment Task relates to the following Learning Outcomes:
  • Extend the techniques learned in ACST255 to permit the calculation and analysis of cashflows dependent upon the death or survival of either or both of two lives, and cashflows dependent upon a fixed term as well as age.
  • Demonstrate the ability to identify key unit concepts and to integrate them to solve and analyse novel problems.

Mid-Semester Exam

Due: 13 September
Weighting: 20%

The mid-semester exam will be a two-hour written paper with no reading time, held during the lecture time. It will cover Sections 1 to 5. 

You are permitted ONE A4 page of paper containing reference material printed on both sides. The material may be handwritten or typed. The page will not be returned to you at the end of the final examination.

Students who have not sat the test will be awarded a mark of 0 for the task, except for cases in which an application for disruptions to studies is made and approved. 


This Assessment Task relates to the following Learning Outcomes:
  • Extend the techniques learned in ACST255 to permit the calculation and analysis of cashflows dependent upon the death or survival of either or both of two lives, and cashflows dependent upon a fixed term as well as age.
  • Describe, develop, apply and analyse methods used to model cashflows contingent upon competing risks; construct and use multiple decrement service tables, and demonstrate understanding of the relationship with associated single decrement tables.
  • Demonstrate the ability to identify key unit concepts and to integrate them to solve and analyse novel problems.

Assignment

Due: 1 November
Weighting: 20%

The assignment will cover Sections 7 to 9 and is to be submitted via both the iLearn site and ACST355 Assignment Box in BESS.

No extensions will be granted. There will be a deduction of 10% of the total available marks made from the total awarded mark for each 24 hour period or part thereof that the submission is late (for example, 25 hours late in submission – 20% penalty). This penalty does not apply for cases in which an application for disruption of studies is made and approved. No submission will be accepted after solutions have been posted.


This Assessment Task relates to the following Learning Outcomes:
  • Extend the techniques learned in ACST255 to permit the calculation and analysis of cashflows dependent upon the death or survival of either or both of two lives, and cashflows dependent upon a fixed term as well as age.
  • Describe, apply and analyse the technique of discounted emerging costs for use in pricing, reserving and assessing profitability, for superannuation funds and related multiple decrement tables, traditional life insurance contracts and unit linked policies.
  • Demonstrate the ability to identify key unit concepts and to integrate them to solve and analyse novel problems.

Final Examination

Due: University Examination Period
Weighting: 60%

The final examination will be a three-hour written paper with ten minutes reading time, held during the University Examination period.

You are permitted ONE A4 page of paper containing reference material printed on both sides. The material may be handwritten or typed. The page will not be returned to you at the end of the final examination.


This Assessment Task relates to the following Learning Outcomes:
  • Extend the techniques learned in ACST255 to permit the calculation and analysis of cashflows dependent upon the death or survival of either or both of two lives, and cashflows dependent upon a fixed term as well as age.
  • Describe, develop, apply and analyse methods used to model cashflows contingent upon competing risks; construct and use multiple decrement service tables, and demonstrate understanding of the relationship with associated single decrement tables.
  • Describe, apply and analyse the technique of discounted emerging costs for use in pricing, reserving and assessing profitability, for superannuation funds and related multiple decrement tables, traditional life insurance contracts and unit linked policies.
  • Define, describe and illustrate the principal forms of heterogeneity within a population and the ways in which selection can occur; define, calculate and analyse the use of various single figure indices, explain the rationale behind the indices, and explain the advantages and disadvantages of the indices for summarising and comparing actual experience in different scenarios.
  • Demonstrate the ability to identify key unit concepts and to integrate them to solve and analyse novel problems.

Delivery and Resources

Classes

The timetables for classes can be found on the University website at: https://timetables.mq.edu.au/2017/. Tutorials commence in week 2 of the session. All lecture classes for weeks 8, 9 and 10 will be held in the computer labs (specific locations will be advised on iLearn announcements in week 1 of session).

Required and recommended texts and / or materials

Optional text. Detailed lecture materials are provided and it is not envisaged that you will require a text.

Lecture handouts. Lecture handouts are available for downloading from the website in advance of lecture classes. Print these and bring them to the relevant lecture. It is expected that you will have these notes in all lectures.

Tables. The Formulae and Tables for Actuarial Examinations book is not required for this unit, and will not be provided in the examination. Instead, you will be asked to generate your own set of tables, based on up-to-date UK mortality tables. There will be Tables Tasks exercises set in the early weeks of the unit that will give you details of how to construct the tables and provide results to spot check your answers. In addition to generating results for your future use, the aim of these tasks is to help you to revise relevant results from ACST255/859. It is important that you keep up-to-date with the Tables Tasks so that you can use your tables to answer questions throughout this unit.

Technology used and required

You will be required to use the iLearn site, Excel and Word.

Unit webpage

Course material is available on the iLearn. To access the teaching website, go to http://ilearn.mq.edu.au and login using your usual login and password.

Teaching and learning activities

Lectures. The unit material is covered in the three hours of lectures each week.

Tutorials. The tutorial is an opportunity for you to discuss the exercises available for each section of work with your tutor. 

Computer lab classes. These will replace all of the lecture classes in weeks 8, 9 and 10.

Material to bring to classes. You are expected to bring to all classes the relevant lecture handout printout for the current and previous weeks, blank paper to complete exercises, a calculator, and your completed Tables Tasks.

Unit Schedule

Week

Wednesday Lecture

Frida Lecture Tutorials

Assessment

1

Section 1: Joint life and last survivor statuses 

Section 2: Simple annuities and assurances involving two lives No tutorial -

2

Section 2 (cont)

Section 3: Contingent and reversionary benefits Sections 1 and 2

-

3

Section 3 (cont)

Section 4: Competing risks Section 3

-

4

Section 4 (cont)

Section 5: Multiple decrement tables Section 4

Online Quiz

5

Section 5 (cont) 

Section 6: Superannuation funds Section 5

-

6

Section 6 (cont) 

Section 6 (cont) Revision

-

7

Mid-semester Exam

No class No tutorial

Mid-semester Exam

STUDY BREAK

MID-SEMESTER STUDY BREAK

   

 

STUDY BREAK

MID-SEMESTER STUDY BREAK

     

8

Section 7: Profit testing - conventional business (in labs)

Section 7 (cont) Section 6

-

9

Section 8: Profit testing - unit-linked business (in labs)

Section 8 (cont) Section 7

-

10

Profit testing revision (in labs)

Profit testing revision (cont) Section 8

-

11

Section 9: Mortality risk factors and selection

Section 9 (cont) No tutorial

-

12

Section 10: Mortality indices

Section 10 (cont) Section 9 

Assignment

13

Revision

Revision and exam information Section 10

-

 

Policies and Procedures

Macquarie University policies and procedures are accessible from Policy Central. Students should be aware of the following policies in particular with regard to Learning and Teaching:

Academic Honesty Policy http://mq.edu.au/policy/docs/academic_honesty/policy.html

Assessment Policy http://mq.edu.au/policy/docs/assessment/policy_2016.html

Grade Appeal Policy http://mq.edu.au/policy/docs/gradeappeal/policy.html

Complaint Management Procedure for Students and Members of the Public http://www.mq.edu.au/policy/docs/complaint_management/procedure.html​

Disruption to Studies Policy (in effect until Dec 4th, 2017): http://www.mq.edu.au/policy/docs/disruption_studies/policy.html

Special Consideration Policy (in effect from Dec 4th, 2017): https://staff.mq.edu.au/work/strategy-planning-and-governance/university-policies-and-procedures/policies/special-consideration

In addition, a number of other policies can be found in the Learning and Teaching Category of Policy Central.

Student Code of Conduct

Macquarie University students have a responsibility to be familiar with the Student Code of Conduct: https://students.mq.edu.au/support/student_conduct/

Results

Results shown in iLearn, or released directly by your Unit Convenor, are not confirmed as they are subject to final approval by the University. Once approved, final results will be sent to your student email address and will be made available in eStudent. For more information visit ask.mq.edu.au.

Supplementary exams

Information regarding supplementary exams, including dates, is available at: 

http://www.businessandeconomics.mq.edu.au/current_students/undergraduate/how_do_i/disruption_to_studies

Student Support

Macquarie University provides a range of support services for students. For details, visit http://students.mq.edu.au/support/

Learning Skills

Learning Skills (mq.edu.au/learningskills) provides academic writing resources and study strategies to improve your marks and take control of your study.

Student Enquiry Service

For all student enquiries, visit Student Connect at ask.mq.edu.au

Equity Support

Students with a disability are encouraged to contact the Disability Service who can provide appropriate help with any issues that arise during their studies.

IT Help

For help with University computer systems and technology, visit http://www.mq.edu.au/about_us/offices_and_units/information_technology/help/

When using the University's IT, you must adhere to the Acceptable Use of IT Resources Policy. The policy applies to all who connect to the MQ network including students.

 

 

Graduate Capabilities

Problem Solving and Research Capability

Our graduates should be capable of researching; of analysing, and interpreting and assessing data and information in various forms; of drawing connections across fields of knowledge; and they should be able to relate their knowledge to complex situations at work or in the world, in order to diagnose and solve problems. We want them to have the confidence to take the initiative in doing so, within an awareness of their own limitations.

This graduate capability is supported by:

Learning outcomes

  • Extend the techniques learned in ACST255 to permit the calculation and analysis of cashflows dependent upon the death or survival of either or both of two lives, and cashflows dependent upon a fixed term as well as age.
  • Describe, develop, apply and analyse methods used to model cashflows contingent upon competing risks; construct and use multiple decrement service tables, and demonstrate understanding of the relationship with associated single decrement tables.
  • Describe, apply and analyse the technique of discounted emerging costs for use in pricing, reserving and assessing profitability, for superannuation funds and related multiple decrement tables, traditional life insurance contracts and unit linked policies.
  • Define, describe and illustrate the principal forms of heterogeneity within a population and the ways in which selection can occur; define, calculate and analyse the use of various single figure indices, explain the rationale behind the indices, and explain the advantages and disadvantages of the indices for summarising and comparing actual experience in different scenarios.
  • Demonstrate the ability to identify key unit concepts and to integrate them to solve and analyse novel problems.

Assessment tasks

  • Online Quiz
  • Mid-Semester Exam
  • Assignment
  • Final Examination

Discipline Specific Knowledge and Skills

Our graduates will take with them the intellectual development, depth and breadth of knowledge, scholarly understanding, and specific subject content in their chosen fields to make them competent and confident in their subject or profession. They will be able to demonstrate, where relevant, professional technical competence and meet professional standards. They will be able to articulate the structure of knowledge of their discipline, be able to adapt discipline-specific knowledge to novel situations, and be able to contribute from their discipline to inter-disciplinary solutions to problems.

This graduate capability is supported by:

Learning outcomes

  • Extend the techniques learned in ACST255 to permit the calculation and analysis of cashflows dependent upon the death or survival of either or both of two lives, and cashflows dependent upon a fixed term as well as age.
  • Describe, develop, apply and analyse methods used to model cashflows contingent upon competing risks; construct and use multiple decrement service tables, and demonstrate understanding of the relationship with associated single decrement tables.
  • Describe, apply and analyse the technique of discounted emerging costs for use in pricing, reserving and assessing profitability, for superannuation funds and related multiple decrement tables, traditional life insurance contracts and unit linked policies.
  • Define, describe and illustrate the principal forms of heterogeneity within a population and the ways in which selection can occur; define, calculate and analyse the use of various single figure indices, explain the rationale behind the indices, and explain the advantages and disadvantages of the indices for summarising and comparing actual experience in different scenarios.
  • Demonstrate the ability to identify key unit concepts and to integrate them to solve and analyse novel problems.

Assessment tasks

  • Online Quiz
  • Mid-Semester Exam
  • Assignment
  • Final Examination

Critical, Analytical and Integrative Thinking

We want our graduates to be capable of reasoning, questioning and analysing, and to integrate and synthesise learning and knowledge from a range of sources and environments; to be able to critique constraints, assumptions and limitations; to be able to think independently and systemically in relation to scholarly activity, in the workplace, and in the world. We want them to have a level of scientific and information technology literacy.

This graduate capability is supported by:

Learning outcomes

  • Extend the techniques learned in ACST255 to permit the calculation and analysis of cashflows dependent upon the death or survival of either or both of two lives, and cashflows dependent upon a fixed term as well as age.
  • Describe, develop, apply and analyse methods used to model cashflows contingent upon competing risks; construct and use multiple decrement service tables, and demonstrate understanding of the relationship with associated single decrement tables.
  • Describe, apply and analyse the technique of discounted emerging costs for use in pricing, reserving and assessing profitability, for superannuation funds and related multiple decrement tables, traditional life insurance contracts and unit linked policies.
  • Define, describe and illustrate the principal forms of heterogeneity within a population and the ways in which selection can occur; define, calculate and analyse the use of various single figure indices, explain the rationale behind the indices, and explain the advantages and disadvantages of the indices for summarising and comparing actual experience in different scenarios.
  • Demonstrate the ability to identify key unit concepts and to integrate them to solve and analyse novel problems.

Assessment tasks

  • Online Quiz
  • Mid-Semester Exam
  • Assignment
  • Final Examination

Changes from Previous Offering

There have been minor changes to the assessment structure.

Research and Practice

This unit uses research by Macquarie University researchers, as well as from other Australian and international researchers (references are given in the unit notes).

You are also required to source and use Australian and international research as part of the assignment in this unit.