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This paper describes a general approach for stochastic modeling of assets returns and liability cash-flows of a typical pensions insurer. On the asset side, we model the investment returns on equities and various classes of fixed-income…

Risk Management · Quantitative Finance 2020-05-27 Sergio Alvares Maffra , John Armstrong , Teemu Pennanen

This article presents a new model for demographic simulation which can be used to forecast and estimate the number of people in pension funds (contributors and retirees) as well as workers in a public institution. Furthermore, the model…

General Finance · Quantitative Finance 2018-01-16 Juan Jose Viquez , Alexander Campos , Jorge Loria , Luis Alfredo Mendoza , Jorge Aurelio Viquez

Insurance and annuity products covering several lives require the modelling of the joint distribution of future lifetimes. In the interest of simplifying calculations, it is common in practice to assume that the future lifetimes among a…

Risk Management · Quantitative Finance 2016-01-19 François Dufresne , Enkelejd Hashorva , Gildas Ratovomirija , Youssouf Toukourou

We introduce a collective model for life insurance where the heterogeneity of each insured, including the health state, is modeled by a diffusion process. This model is influenced by concepts in statistical mechanics. Using the proposed…

General Finance · Quantitative Finance 2020-12-18 Jirô Akahori , Yuuki Ida , Maho Nishida , Shuji Tamada

Using unique research data, we investigate disability retirement risk under the statutory public sector pension scheme in Finland. The statistical analysis yields two indicators: risk for upcoming permanent disability pension and critical…

General Economics · Economics 2024-10-29 Petra Sohlman , Risto Louhi , Janne Salonen

Many insurance products and pension plans provide benefits which are related to couples, and thus under influence of the survival status of two lives. Some studies show the future lifetime of couples is correlated. Three reasons are…

Applications · Statistics 2018-06-27 Amin Hassan Zadeh , Soroush Amirhashchi

We revisit surplus on general life insurance contracts, represented by Markov models. We classify technical bases in terms of boundary conditions in Thiele's equation(s), allowing more general regulations than Scandinavian-style…

Risk Management · Quantitative Finance 2023-10-27 Oytun Haçarız , Torsten Kleinow , Angus S. Macdonald

Forecasts of mortality provide vital information about future populations, with implications for pension and health-care policy as well as for decisions made by private companies about life insurance and annuity pricing. Stochastic…

Applications · Statistics 2018-06-21 Jason Hilton , Erengul Dodd , Jonathan J. Forster , Peter W. F. Smith

We propose a scheme or procedure for doing practical calculations with generalized seniority. It reduces the total computing time by calculating and storing in advance a set of intermediate quantities, taking advantage of the memory…

Nuclear Theory · Physics 2015-10-28 L. Y. Jia

Pension fund populations often have mortality experiences that are substantially different from the national benchmark. In a motivating case study of Brazilian corporate pension funds, pensioners are observed to have mortality that is…

Applications · Statistics 2025-06-05 Eduardo F. L. de Melo , Michael Ludkovski , Rodrigo S. Targino

This paper proposes a simulation-based framework for assessing and improving the performance of a pension fund management scheme. This framework is modular and allows the definition of customized performance metrics that are used to assess…

Optimization and Control · Mathematics 2026-03-17 Raphael Chinchilla , Thomas D. Rueter , Timothy R. McDade , Peter R. Fisher , Emmanuel Candes , Trevor Hastie , Stephen Boyd

We consider general subordination and obtain the formula of the subordinated predictable compensator. An example of application is given.

Probability · Mathematics 2015-10-19 Henry Chiu

In a stochastic volatility framework, we find a general pricing equation for the class of payoffs depending on the terminal value of a market asset and its final quadratic variation. This allows a pricing tool for European-style claims…

Pricing of Securities · Quantitative Finance 2012-06-12 Lorenzo Torricelli

We present a joint copula-based model for insurance claims and sizes. It uses bivariate copulae to accommodate for the dependence between these quantities. We derive the general distribution of the policy loss without the restrictive…

Statistics Theory · Mathematics 2012-09-25 Nicole Kraemer , Eike C. Brechmann , Daniel Silvestrini , Claudia Czado

We quantify the benefit of collectivised investment funds, in which the assets of members who die are shared among the survivors. For our model, with realistic parameter choices, an annuity or individual fund requires approximately 20\%…

Portfolio Management · Quantitative Finance 2020-04-08 John Armstrong , Cristin Buescu

We review Markov models of surplus in life insurance based on a counting process following Norberg (1991), uniting probabilistic theory with elements of practice largely drawn from UK experience. First, we organize models systematically…

Pricing of Securities · Quantitative Finance 2025-09-03 Oytun Haçarız , Torsten Kleinow , Angus S. Macdonald

The aim of this paper is to propose a realistic and operational model to quantify the systematic risk of mortality included in an engagement of retirement. The model presented is built on the basis of model of Lee-Carter. The stochastic…

General Finance · Quantitative Finance 2010-01-13 Frédéric Planchet , Laurent Faucillon , Marc Juillard

By discussing several examples, the theory of generalized functional models is shown to be very natural for modeling some situations of reasoning under uncertainty. A generalized functional model is a pair (f, P) where f is a function…

Artificial Intelligence · Computer Science 2013-02-08 Paul-Andre Monney

The main purpose of this work is to derive a partial differential equation for the reserves of life insurance liabilities subject to stochastic interest rates where the benefits and premiums depend directly on changes in the interest rate…

Risk Management · Quantitative Finance 2021-01-01 David R. Baños

This paper aims to review the methodology behind the generalized linear models which are used in analyzing the actuarial situations instead of the ordinary multiple linear regression. We introduce how to assess the adequacy of the model…

Statistical Finance · Quantitative Finance 2016-11-09 Murwan H. M. A. Siddig
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