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Group 4
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Net premium reserves by annuity and time of payment:
Payment of
Premium Payment
Compensation
Single or installment
Semi Continuous When the insured dies
with constant stages
Reserves (continuous insurance)
(discrete annuity)
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The calculation of premium reserves is divided into two, that is:
Prospective
Reserves Retrospective
Reserves
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Retrospective Reserves
A retrospective reserve is a reserve calculation based on the total
amount of revenue in the past until the reserves calculation is reduced
by the amount of expenditure in the past, for each policyholder
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Secara aljabar hubungan ini ditulis:
𝑁𝑥 − 𝑁𝑥+𝑡
𝑡𝑉 = 𝑡 𝑈𝑥 − 𝑡 𝑘𝑥 𝑡 𝑈𝑥 =
𝐷𝑥+𝑡
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Contoh soal
Determine the year-end reserves of the 10th and 20th year end reserves for a 30-year-
old who takes 20 years insurance with a sum assured of Rp 10,000,000.-
Solution:
At first sought advance premium annual net 20 years insurance for 30 year olds with
compensation Rp 10.000.000, -
1 7
𝐴′ 30: 20 𝑀30 − 𝑀50 20 𝑉 = 𝑃30:20 20 𝑈30 − 10 20 𝑘30
𝑃′ 30:20 = 107 = 107 = 𝑅𝑝 24.523,84084 ′
𝑁30 − 𝑁50 7
𝑀30 − 𝑀50
𝑎ሷ 30:20 𝑁30 − 𝑁50 = 𝑃 30:20 − 10
𝐷50 𝐷50
10𝑉 1
= 𝑃30:20 7 𝑀30 − 𝑀50 𝑁30 − 𝑁50 𝑀30 − 𝑀50
10 𝑈30 − 10 10 𝑘30 = 10 7
. −
1
= 𝑃30:20
𝑁30 −𝑁40
− 107 𝑀30 −𝑀40 = 𝑅𝑝 87.916,95 𝑁30 − 𝑁50 𝐷50 𝐷50
𝐷40 𝐷
40 𝑀30 − 𝑀50 𝑀30 − 𝑀50
= 10 7 −
𝐷50 𝐷50
=0
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Prospective Reserves
The amount of prospective reserves at a point in time is derived by subtracting the
actuarial present value of future valuation premiums from the actuarial present value
of the future insurance benefits.
Where:
𝑥 : age when the policy is issued
𝑡 : years since the policy was issued
𝑃 : the annual net premium for the compensation of Rp1 for 𝑥
𝑡𝑉 : year-end reserves at year 𝑡
𝐴𝑥+𝑡 : benefits that would come at the age of 𝑥 + 𝑡
𝑃. 𝑎ሷ 𝑥+𝑡 : cash value of future premium remains at the age of 𝑥 + 𝑡
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Example of general formula of prospective reserves for type of n-years insurance end
owment with compensation of 1 unit for a person who is x years old.
1 1
𝑉
𝑡 𝑥:𝑛ȁ = 𝑅𝐴 𝑥+𝑛:𝑛−𝑡ȁ − 𝑃𝑥:𝑛ȁ 𝑎ሷ 𝑥+𝑡:𝑛−𝑡ȁ
Where:
𝑡𝑉𝑥:𝑛ȁ : end-year prospective reserves at year-t of insurance endowment
𝑅𝐴1𝑥+𝑛:𝑛−𝑡ȁ : future compensation at age 𝑥 + 𝑡
1
𝑃𝑥:𝑛 ȁ 𝑎ሷ 𝑥+𝑡:𝑛−𝑡ȁ : cash value at the age 𝑥 + 𝑡 of the remaining premium of the future
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Modified Reserves
Modified reserves are based on premiums which are not level by duration. Almost
all modified reserves are intended to accumulate lower reserves in early policy
years than they would under the net level premium method. This is to allow the
issuer greater margins to pay for expenses which are usually very high in these
years. To do this, modified reserves assume a lower premium in the first year or
two than the net level premium, and later premiums are higher.
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Page 10
New Jersey’s Method
Using a net premium is adjusted whereby there is a requirement that must be fulfilled is a policy that has a net ann
ual premium of less than the annual premium net life insurance with 20 times the premium payment with the comp
𝑐
ensation and age there but the gross premium exceeds 1,5𝐷𝑥
𝑥
Using this method determines that the year-end reserves are zero. So mathematically the premium cash value in t
he first year is written
𝐶𝑥
𝛼𝐽 =
𝐷𝑥
𝑃−𝐶𝑥ൗ𝐷𝑥
Thus, the value of 𝛽𝐽 =𝑃+ 𝑎𝑥:19
The reserve value using the New Jersey method is the net premium issued for persons over a year who know 𝑥 +
1, so the prospective reserve value using this method is
𝑉𝑡𝐽 𝑥: 𝑛 = 𝑆 𝐴𝑥+𝑛:𝑛−𝑡 − 𝛽 𝐽 𝛼ሷ 𝑥+𝑡:20−𝑡 ) − 𝑃𝑥:𝑛 (𝛼ሷ 𝑥+𝑡:𝑛−𝑡 − 𝛼ሷ 𝑥+𝑡:20−𝑡 ), with
Fackler’s Method
It was first introduced by the American actuary, David Parks Fackler. General formula
𝑉𝑡+1 = 𝑉𝑡 + 𝑃 𝑢𝑥+𝑡 − 𝑘𝑥+𝑡 , where
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Latihan soal 1
Determine the 20th year end reserve for a 30-year term insurance policy with a sum
insured of Rp 100,000,000, - issued to someone 30 years old!
Solution:
At first sought advance premium annual net 30 years insurance for 30 year olds with
compensation Rp 100.000.000, -
′
𝐴 30:30 𝑀30 −𝑀60
𝑃′ 30:30 = 108 𝑎ሷ = 108 = 𝑅𝑝 …
30:30 𝑁30 −𝑁60
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THANK YOU!