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Journal of Actuarial Practice (1993–2006)

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Date of this Version

1997

Document Type

Article

Citation

Journal of Actuarial Practice 5 (1997), pp. 49-77

Comments

Copyright 1997 Absalom Press

Abstract

Monte Carlo simulation is used to develop a flexible framework to measure the profitability, risk, and competitiveness of any insurance product. A genetic algorithm is then used to seek the optimum asset allocations that form the profitability-risk-competitiveness frontier and to examine the profitability, risk, and competitiveness trade-off's. We also show how to select the appropriate asset allocation and crediting strategy in order to position the product at the DeSired location on the profitability-risk-competitiveness spectrum.

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