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Actuarial cash flow projections are used to estimate the future cash flows of insurance and other financial products. This is an important part of the actuarial process, as it helps actuaries and other decision makers to understand the potential risks and rewards of a product, and to make informed decisions about its design, pricing, and […]

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Probability distribution is a mathematical function that describes the likelihood of different outcomes in a given situation. Actuaries use probability distributions to model and analyze risks in a variety of contexts, such as insurance, finance, and investments. Probability distributions are typically described using a function, such as a probability density function or a cumulative distribution […]

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Risk and uncertainty are often used interchangeably, but they actually have different meanings. Risk refers to a situation where the outcome is unknown, but the possible outcomes and their likelihood of occurring are known. In other words, risk is quantifiable and can be measured. Uncertainty, on the other hand, refers to a situation where the possible […]

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Anti-selection is a significant challenge faced by insurance companies. It refers to the phenomenon in which individuals with a higher probability of making a claim (i.e. higher risk) are more likely to purchase insurance. This can lead to an adverse selection problem, in which the insurance company ends up with a disproportionate number of high-risk […]

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Actuaries perform User acceptance testing (UAT) of actuarial models to ensure that it meets the needs and requirements of the end users and is easy to use. This testing is typically performed by a group of end users or stakeholders, who test the model to ensure that it meets their needs and is able to provide accurate and […]