Actuarial Mathematics for Life Contingent Risks: (International Series on Actuarial Science)

The substantially updated third edition of the popular Actuarial Mathematics for Life Contingent Risks is suitable for advanced undergraduate and graduate students of actuarial science, for trainee actuaries preparing for professional actuarial examinations, and for life insurance practitioners who wish to increase or update their technical knowledge. The authors provide intuitive explanations alongside mathematical theory, equipping readers to understand the material in sufficient depth to apply it in real-world situations and to adapt their results in a changing insurance environment. Topics include modern actuarial paradigms, such as multiple state models, cash-flow projection methods and option theory, all of which are required for managing the increasingly complex range of contemporary long-term insurance products. Numerous exam-style questions allow readers to prepare for traditional professional actuarial exams, and extensive use of Excel ensures that readers are ready for modern, Excel-based exams and for the actuarial work environment. The Solutions Manual (ISBN 9781108747615), available for separate purchase, provides detailed solutions to the text's exercises.

Table of Contents:
Preface to the third edition; 1. Introduction to life and long term health insurance; 2. Survival models; 3. Life tables and selection; 4. Insurance benefits; 5. Annuities; 6. Premium calculation; 7. Policy values; 8. Multiple state models; 9. Multiple decrement models; 10. Joint life and last survivor benefits; 11. Pension mathematics; 12. Yield curves and non-diversifiable risk; 13. Emerging costs for traditional life insurance; 14. Universal life insurance; 15. Emerging costs for equity-linked insurance; 16. Option pricing; 17. Embedded options; 18. Estimating survival models; 19. Stochastic longevity models; Appendix A. Probability and statistics; Appendix B. Numerical techniques; Appendix C. Monte Carlo simulation; Appendix D. Tables; References; Index.

Review :
'Some decades ago, Life Contingencies were viewed as the boring part of actuarial mathematics. The third (substantially enlarged) edition of this classic is proof of how wrong that view was. Some of the most exciting developments of our field are taking place here. The authors are to be congratulated on having made the latter abundantly clear. This surely is my desert island book on the topic!' Paul Embrechts, Emeritus Professor of Insurance Mathematics, ETH Zurich Review of the second edition: 'This book is an excellent textbook for undergraduate, master's level graduate students, and practitioners. It is easy to read, clearly written, and mathematically rigorous. The authors clearly emphasize important concepts and equations, helping readers to the see the forest from the trees. For example they box important formulas and present in bold type assumptions, formulas, statements, examples, and solutions. Many graphs, figures and tables compete a useful summary for the reader's convenience.' Kissop Lee, The American Statistician Review of the second edition: 'The book is well written and the content is generally quite accessible … The content focuses on examples of practical actuarial work through use of spreadsheets … Overall, the book provides a good framework in life insurance contingencies so as to cover mortality, longevity interest rate modeling, pricing and guarantees. The strength of the book lies in the fact that this is the 2nd edition and reflects modern actuarial methods that have become popular since the last edition was published.' Gautam Kakar, Annals of Actuarial Science Review of the first edition: 'The book is well written, well organized, and easy to read. It may be an excellent textbook for both undergraduate and graduate programs in actuarial science. It is also a rich source of useful information for practitioners of the actuarial profession and financial risk managers who seek a practical and inspiring guide to liability cash flow modeling and valuation.' Scandinavian Actuarial Journal