ACT 101 · Year 1 · Semester 1 · 3 credits · Actuarial
Introduction to Actuarial Science & Insurance
Navigating uncertainty with mathematics, data, and professional judgement: the foundational architecture of actuarial practice.
The Solvency Line: Maya Lin at Meridian Mutual
When an inherited portfolio and an aggressive expansion push century-old Meridian Mutual toward regulatory intervention, a first-year actuarial analyst must trace risk across operations, products, pensions, and capital models to save forty-five thousand policyholders.
Seven in the morning on Maya Lin's second week at Meridian Mutual. Chief Actuary David Keller drops a manila binder on her desk: sixty municipal transport fleets joined Meridian's commercial pool last quarter, but claims are already running three times the initial forecast. If we cannot explain why the variance exploded by Friday, the underwriting committee will double premiums across the board and destroy the entire book.
Transcript
Seven in the morning on Maya Lin's second week at Meridian Mutual. Chief Actuary David Keller drops a manila binder on her desk: sixty municipal transport fleets joined Meridian's commercial pool last quarter, but claims are already running three times the initial forecast. If we cannot explain why the variance exploded by Friday, the underwriting committee will double premiums across the board and destroy the entire book.
- Distinguish between pure risk, speculative risk, and insurable risk under actuarial criteria.
- Derive and interpret the mathematical mechanism of risk pooling using the Law of Large Numbers.
- Calculate expected loss, variance of aggregate claims, and pure premium for independent exposure units.
- Explain how information asymmetry creates adverse selection and moral hazard, and identify basic underwriting remedies.