General Information
This subject is designed to develop mathematical techniques which are used to model and value cash flows that are dependent on events such as death, survival, illness and retirement. The breadth of topics covered provides students with the principles and practical skills required for a variety of life insurance applications, including pricing of life Insurance, assurance and annuities, reserving, assessment of profitability and defined benefit pensions.
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Details
Academic unit: Bond Business School Subject code: ACSC71-301 Subject title: Contingencies Subject level: Postgraduate Semester/Year: January 2025 Credit points: 10.000 -
Delivery & attendance
Timetable: https://bond.edu.au/timetable Delivery mode: Standard Workload items: - Seminar: x12 (Total hours: 24) - Seminar
- Personal Study Hours: x12 (Total hours: 72) - Recommended study time & reviewing materials
- Workshop: x12 (Total hours: 24) - Workshop
Attendance and learning activities: Attendance at all class sessions is expected. Students are expected to notify the instructor of any absences with as much advance notice as possible. +++++ BBS uses a self and peer-evaluation system to support students engaged in group-based assessments. Students are expected to provide this feedback in a timely fashion as part of their assessment. The information gathered is used by the educator as partial evidence of equitable contributions by all group members and helps to determine individual marks for group assessments. -
Resources
Prescribed resources: No Prescribed resources.
After enrolment, students can check the Books and Tools area in iLearn for the full Resource List.iLearn@Bond & Email: iLearn@Bond is the Learning Management System at Bond University and is used to provide access to subject materials, class recordings and detailed subject information regarding the subject curriculum, assessment, and timing. Both iLearn and the Student Email facility are used to provide important subject notifications.
Additionally, official correspondence from the University will be forwarded to students’ Bond email account and must be monitored by the student.
To access these services, log on to the Student Portal from the Bond University website as www.bond.edu.au
| Academic unit: | Bond Business School |
|---|---|
| Subject code: | ACSC71-301 |
| Subject title: | Contingencies |
| Subject level: | Postgraduate |
| Semester/Year: | January 2025 |
| Credit points: | 10.000 |
| Timetable: | https://bond.edu.au/timetable |
|---|---|
| Delivery mode: | Standard |
| Workload items: |
|
| Attendance and learning activities: | Attendance at all class sessions is expected. Students are expected to notify the instructor of any absences with as much advance notice as possible. +++++ BBS uses a self and peer-evaluation system to support students engaged in group-based assessments. Students are expected to provide this feedback in a timely fashion as part of their assessment. The information gathered is used by the educator as partial evidence of equitable contributions by all group members and helps to determine individual marks for group assessments. |
| Prescribed resources: | No Prescribed resources. After enrolment, students can check the Books and Tools area in iLearn for the full Resource List. |
|---|---|
| iLearn@Bond & Email: | iLearn@Bond is the Learning Management System at Bond University and is used to provide access to subject materials, class recordings and detailed subject information regarding the subject curriculum, assessment, and timing. Both iLearn and the Student Email facility are used to provide important subject notifications. Additionally, official correspondence from the University will be forwarded to students’ Bond email account and must be monitored by the student. To access these services, log on to the Student Portal from the Bond University website as www.bond.edu.au |
Enrolment requirements
| Requisites: |
Pre-requisites:Co-requisites:There are no co-requisites |
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| Assumed knowledge: |
Assumed knowledge is the minimum level of knowledge of a subject area that students are assumed to have acquired through previous study. It is the responsibility of students to ensure they meet the assumed knowledge expectations of the subject. Students who do not possess this prior knowledge are strongly recommended against enrolling and do so at their own risk. No concessions will be made for students’ lack of prior knowledge.
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| Restrictions: |
Nil |
Assurance of learning
Assurance of Learning means that universities take responsibility for creating, monitoring and updating curriculum, teaching and assessment so that students graduate with the knowledge, skills and attributes they need for employability and/or further study.
At Bond University, we carefully develop subject and program outcomes to ensure that student learning in each subject contributes to the whole student experience. Students are encouraged to carefully read and consider subject and program outcomes as combined elements.
Program Learning Outcomes (PLOs)
Program Learning Outcomes provide a broad and measurable set of standards that incorporate a range of knowledge and skills that will be achieved on completion of the program. If you are undertaking this subject as part of a degree program, you should refer to the relevant degree program outcomes and graduate attributes as they relate to this subject.
Subject Learning Outcomes (SLOs)
On successful completion of this subject the learner will be able to:
- Demonstrate thorough knowledge of simple assurance and annuity contracts, and develop formulae for the means and variances of the present values of the payments under these contracts, assuming constant deterministic interest.
- Compute net premiums and net premium reserves, using ultimate or select mortality, for simple insurance contracts, increasing and decreasing benefits and annuities.
- Calculate gross premiums and reserves of assurance and annuity contracts.
- Apply appropriate methods to value or project cash flows that are contingent upon multiple transition or decrement events.
- Apply projected cash flow techniques for pricing, reserving, and assessing profitability.
- Demonstrate the ability to produce a written report that communicates ideas clearly, cogently and thoroughly communicates, using a professional style and format.
Generative Artificial Intelligence in Assessment
The University acknowledges that Generative Artificial Intelligence (Gen-AI) tools are an important facet of contemporary life. Their use in assessment is considered in line with students’ development of the skills and knowledge which demonstrate learning outcomes and underpin study and career success. Instructions on the use of Gen-AI are given for each assessment task; it is your responsibility to adhere to these instructions.
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Assessment details
Type Task % Timing* Outcomes assessed Computer-Aided Examination (Limited Open) Comprehensive final examination 45.00% Final Examination Period 1,2,3,4,5,6 Computer-Aided Examination (Limited Open) Examination covering material related to SLO 1 through 3. 35.00% Week 7 (Mid-Semester Examination Period) 1,2,3,6 Assignment Determine answers to a series of technical questions using theoretical or practice-based methods. Demonstrate understanding of the actuarial modelling process and how changes in data or assumption inputs may affect your answers. 10.00% Week 4 1,2,3,6 Assignment Determine answers to a series of technical questions using theoretical or practice-based methods. Demonstrate understanding of the actuarial modelling process and how changes in data or assumption inputs may affect your answers. 10.00% Week 9 4,5,6 - * Assessment timing is indicative of the week that the assessment is due or begins (where conducted over multiple weeks), and is based on the standard University academic calendar
- C = Students must reach a level of competency to successfully complete this assessment.
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Assessment criteria
Assessment criteria
High Distinction 85-100 Outstanding or exemplary performance in the following areas: interpretative ability; intellectual initiative in response to questions; mastery of the skills required by the subject, general levels of knowledge and analytic ability or clear thinking. Distinction 75-84 Usually awarded to students whose performance goes well beyond the minimum requirements set for tasks required in assessment, and who perform well in most of the above areas. Credit 65-74 Usually awarded to students whose performance is considered to go beyond the minimum requirements for work set for assessment. Assessable work is typically characterised by a strong performance in some of the capacities listed above. Pass 50-64 Usually awarded to students whose performance meets the requirements set for work provided for assessment. Fail 0-49 Usually awarded to students whose performance is not considered to meet the minimum requirements set for particular tasks. The fail grade may be a result of insufficient preparation, of inattention to assignment guidelines or lack of academic ability. A frequent cause of failure is lack of attention to subject or assignment guidelines. Quality assurance
For the purposes of quality assurance, Bond University conducts an evaluation process to measure and document student assessment as evidence of the extent to which program and subject learning outcomes are achieved. Some examples of student work will be retained for potential research and quality auditing purposes only. Any student work used will be treated confidentially and no student grades will be affected.
| Type | Task | % | Timing* | Outcomes assessed |
|---|---|---|---|---|
| Computer-Aided Examination (Limited Open) | Comprehensive final examination | 45.00% | Final Examination Period | 1,2,3,4,5,6 |
| Computer-Aided Examination (Limited Open) | Examination covering material related to SLO 1 through 3. | 35.00% | Week 7 (Mid-Semester Examination Period) | 1,2,3,6 |
| Assignment | Determine answers to a series of technical questions using theoretical or practice-based methods. Demonstrate understanding of the actuarial modelling process and how changes in data or assumption inputs may affect your answers. | 10.00% | Week 4 | 1,2,3,6 |
| Assignment | Determine answers to a series of technical questions using theoretical or practice-based methods. Demonstrate understanding of the actuarial modelling process and how changes in data or assumption inputs may affect your answers. | 10.00% | Week 9 | 4,5,6 |
- * Assessment timing is indicative of the week that the assessment is due or begins (where conducted over multiple weeks), and is based on the standard University academic calendar
- C = Students must reach a level of competency to successfully complete this assessment.
Assessment criteria
| High Distinction | 85-100 | Outstanding or exemplary performance in the following areas: interpretative ability; intellectual initiative in response to questions; mastery of the skills required by the subject, general levels of knowledge and analytic ability or clear thinking. |
|---|---|---|
| Distinction | 75-84 | Usually awarded to students whose performance goes well beyond the minimum requirements set for tasks required in assessment, and who perform well in most of the above areas. |
| Credit | 65-74 | Usually awarded to students whose performance is considered to go beyond the minimum requirements for work set for assessment. Assessable work is typically characterised by a strong performance in some of the capacities listed above. |
| Pass | 50-64 | Usually awarded to students whose performance meets the requirements set for work provided for assessment. |
| Fail | 0-49 | Usually awarded to students whose performance is not considered to meet the minimum requirements set for particular tasks. The fail grade may be a result of insufficient preparation, of inattention to assignment guidelines or lack of academic ability. A frequent cause of failure is lack of attention to subject or assignment guidelines. |
Quality assurance
For the purposes of quality assurance, Bond University conducts an evaluation process to measure and document student assessment as evidence of the extent to which program and subject learning outcomes are achieved. Some examples of student work will be retained for potential research and quality auditing purposes only. Any student work used will be treated confidentially and no student grades will be affected.
Study Information
Submission procedures
Students must check the iLearn@Bond subject site for detailed assessment information and submission procedures.
Policy on late submission and extensions
A late penalty will be applied to all overdue assessment tasks unless the Lead Educator grants an extension. The standard penalty will be 10% of marks awarded to that assessment per day late with no assessment to be accepted seven days after the due date. Where a student is granted an extension, the penalty of 10% per day late starts from the new due date.
Academic Integrity
Bond University‘s Student Code of Conduct Policy , Student Charter, Academic Integrity Policy and our Graduate Attributes guide expectations regarding student behaviour, their rights and responsibilities. Information on these topics can be found on our Academic Integrity webpage recognising that academic integrity involves demonstrating the principles of integrity (honesty, fairness, trust, professionalism, courage, responsibility, and respect) in words and actions across all aspects of academic endeavour.
Staff are required to report suspected misconduct. This includes all types of plagiarism, cheating, collusion, fabrication or falsification of data/content or other misconduct relating to assessment such as the falsification of medical certificates for assessment extensions. The longer term personal, social and financial consequences of misconduct can be severe, so please ask for help if you are unsure.
If your work is subject to an inquiry, you will be given an opportunity to respond and appropriate support will be provided. Academic work under inquiry will not be marked until the process has concluded. Penalties for misconduct include a warning, reduced grade, a requirement to repeat the assessment, suspension or expulsion from the University.
Feedback on assessment
Feedback on assessment will be provided to students according to the requirements of the Assessment Procedure Schedule A - Assessment Communication Procedure.
Whilst in most cases feedback should be provided within two weeks of the assessment submission due date, the Procedure should be checked if the assessment is linked to others or if the subject is a non-standard (e.g., intensive) subject.
Accessibility and Inclusion Support
Support is available to students where a physical, mental or neurological condition exists that would impact the student’s capacity to complete studies, exams or assessment tasks. For effective support, special requirement needs should be arranged with the University in advance of or at the start of each semester, or, for acute conditions, as soon as practicable after the condition arises. Reasonable adjustments are not guaranteed where applications are submitted late in the semester (for example, when lodged just prior to critical assessment and examination dates).
As outlined in the Accessibility and Inclusion Policy, to qualify for support, students must meet certain criteria. Students are also required to meet with the Accessibility and Inclusion Advisor who will ensure that reasonable adjustments are afforded to qualifying students.
For more information and to apply online, visit BondAbility.
Additional subject information
This subject is designed as a possible exemption for the CM1 (part) Life Contingencies course from the Institute of Actuaries of Australia. Students earning a satisfactory result (at least 65% averaged with ACSC71-201) from this subject may be eligible for exemption from the Institute for the CM1 course. As part of the requirements for Business School quality accreditation, the Bond Business School employs an evaluation process to measure and document student assessment as evidence of the extent to which program and subject learning outcomes are achieved. Some examples of student work will be retained for potential research and quality auditing purposes only. Any student work used will be treated confidentially and no student grades will be affected
Subject curriculum
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Mortality Selection and life table construction
Explain why it is necessary to have different mortality tables for different classes of lives. Conversion of mortality data from discrete to continuous time and application in continuous time modelling.
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Simple assurance and annuity contracts
Develop formulae for the means and variances of the present values of the payments under these contracts, assuming constant deterministic interest. Describe and use practical methods of evaluating expected values and variances of these simple contracts.
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Increasing benefit contracts that have pre-defined of profit-based increases
Describe the different types of bonuses that can be applied to simple annuity and assurance contracts. Understand the circumstances surrounding investment and bonus decisions linked to each type of bonus. Determine expected values and variances of these contracts using a formula-based or practical approach.
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Equations of value and pricing of insurance policies, including net and gross premium calculations
Use the equivalence principle to describe and calculate, using ultimate or select mortality, net and gross premiums including singular, annual or more-frequent premium structures. Define the gross future loss random variable for various insurance contracts and apply the outcome to likelihood of profit calculations.
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Policy values and reserving for net and gross premium contracts.
Understand the difference between net and gross premium policy values (or reserves) and why an insurance company establishes reserves. Calculate net and gross premium policy values (or reserves) prospectively and retrospectively for a variety of insurance contracts (including those with variable benefits). Understand and derive the recursive relationship that exists between consecutive policy values (or reserves) under certain conditions. Apply policy value and reserve calculations to the analysis of changes in surplus due to mortality experience.
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Life insurance on two lives
Extend the techniques of objectives 1-5 to deal with cash flows dependent upon the death or survival of either or both of two lives.
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Contingent probabilities of death
Extend the techniques of objectives 1-6 to deal with cash flows dependent upon the death or survival of either or both of two lives as well as some other contingency, including specifying first or second death, minimum term of payment and reversionary annuities.employee’s earnings history, tenure of service and age. The work with defined benefit pension is a traditional area actuaries specialise in and it is now still active in some countries in the world. The basic calculation method of a defined benefit pension is demonstrated.
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Cash flow valuation contingent upon multiple transition events
Construct formulae for the expected present values of cash flows that are contingent upon multiple transition events, including simple health insurance premiums and benefits, and calculate these in simple cases. Regular premiums and sickness benefits are payable continuously and assurance benefits are payable immediately on transition.
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Multi-decrement model in life insurance practice and pension scheme
Use multiple decrement tables to evaluate expected present values of cash flows dependent upon more than one decrement, including those of pension schemes.
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Actuarial cash flow projection and valuation
Describe and use projected cash flow techniques, where and as appropriate for use in pricing, reserving, and assessing profitability.