Mr Des Welch 619-202 Theory of Statistics and 300-203 Mathematics in the Financial World. First semester Two one-and-a-half hour lectures and a one-hour tutorial per week On completion of this subject the student will be able to:

• analyse simple problems of emerging cost using a single decrement model, which describes the evolution of a population;
• calculate the present value and accumulated value of a stream of payments using a single rate of interest and taking into account the probability of the payments being made;
• define and use annuity functions and assurance functions for a single decrement model, including both select and ultimate functions;
• evaluate the liabilities under a life insurance or annuity contract, in terms of emerging costs and in terms of present values, for the purpose of product pricing, reserving and the calculation of surrender values;
• demonstrate how the emergence of profit on a life insurance or annuity contract depends on the interaction between the pricing basis and reserving basis;
• describe and apply techniques for analysing a delay (or run-off) triangle and projecting the ultimate position; and
• explain the workings of a simple no claims discount (NCD) system.

The life table; the application of probability to contingencies of human life; commutation functions; select tables; annuities and assurances on single lives; office premiums; policy values; extra risks; laws of mortality; construction of tables. A 3-hour end-of-semester examination(85%) and a one and a half hour examination during the semester (15%).