Interest rates play a vital role in actuarial cash flow models by helping us figure out the value of money over time. In this blog post, we'll show you how to use interest rates in a Python cash flow model with a practical example.
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Often, when we first learn about the time value …
With actuarial cash flow models, we try to predict the future. The results of cash flow models are put on a timeline with future dates. In this post, we will discuss time in actuarial cash flow models.
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Let's start with the beginning. Timeline starts at zero (\( t=0 \)) which reflects the valuation period. If the reporting period is the end …
Insurance companies rely on two main approaches for cash flow modelling: deterministic and stochastic. These models help estimate future liabilities of insurance products, guiding actuaries in predicting the future using historical data and expert judgment.
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Imagine predicting the future: one way is to follow the most likely path, while the other is like exploring various possible paths, akin to the multiverse concept in Spiderman, where multiple worlds have slightly different versions of Peter Parker.
In the deterministic approach, we calculate the …
Welcome to the first post in our new series, "Cloud computing". In this series, we'll delve into the world of cloud computing and explore how it can be effectively utilized for actuarial purposes. In this post, our focus will be on running a cash flow model and saving the results in the cloud.
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Cloud computing delivers IT resources, such as servers, computing power, networking, and databases, over the internet on an "on-demand" basis. Leading cloud infrastructure providers include Amazon Web Services (AWS), Microsoft Azure and Google Cloud. For this guide, we'll use AWS …
In this blog post, we explore the topic of multiple life functions within actuarial science. Up until now, our focus has been on insurance products that revolved around the life of an individual. However, in this exploration, we direct our focus to insurance products that involve multiple insured persons. We'll begin by exploring the various types of such products and then roll up our sleeves to construct a basic model using Python, leveraging the cashflower package.
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Expanding upon the concept of life insurance …