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Life Branch Maintains Positive Real Growth Rate


With inflation for the year to 31 August 2009 standing at 5,34%, Life Branch premium growth rates of 12,82% comfortably exceed inflation.

Total premium production in the life branch for eight months amounted to 1.240,6 million TL. The majority of this growth comes from credit life business, and unemployment products.

Figures released today by the Association of Turkey's Insurance and Reinsurance Companies show that, whilst the market showed an overall growth rate of nearly 13% in the life branch, there are extreme differences between the performances of the different companies.

Compare your IBNR with the market


Since the introduction of the legislation requiring calculation of IBNRs (Incurred But Not Yet Reported Claims) using the actuarial chain-ladder method, there has been a lot of debate in the market as to whether the calculation results in an inflated estimate of reserves.

So that companies can make a more accurate assessment of their position relating to IBNRs compared with the market, the Association of the Insurance and Reinsurance Companies of Turkey has published a table showing market statistics as at 30 June 2009.

For life branch, the total IBNR calculated by companies gross of reinsurance was 37,24 m TL; this amounts to 2,18% of premium and 27,73% the outstanding claims reserve for known claims calculated on a claim by claim basis.

No Change to BES Leader Board


With the total funds under management in the BES personal pension system fast approaching 8,5 billion TL, I thought it was time to update a previous article concerning rankings of companies according to Funds Under Management.

The latest statistics from the Pensions Monitoring Centre show that most companies have experienced very little change in market share since April. This means that the clear demarcation in the sector into four groupings based on size is pretty much unchanged. Anadolu Hayat in second position has dramatically narrowed  the gap between themselves and Aviva SA (market leader) by increasing their market share by 0,5% while Aviva's fell by 0,4%.

Actuarial Exam Dates 2009


The dates for the actuarial exams in the autumn of 2009 have been set as follows: 

Level 1

Financial Maths: 10 October

Probability and Statistics: 11 October

Maths: 17 October

Basic Insurance and Economics: 18 October 

Watch Out For the Technical Interest Rate Guarantee


Today HSBC's investment bulletin shows that the benchmark 2011 Treasury Bond yield fell to 8,85%. This is a far cry from the heady days of 3 figure bond yields that we saw about a decade ago.

It is also under the 9% guaranteed rate of interest that applies to many savings policies. One of the conditions of writing Savings business in Turkey is the provision of a guaranteed minimum interest rate to policyholders - the "technical interest rate guarantee". Back in the 1980s and 1990s companies happily gave a guarantee of 9%, never dreaming that such a guarantee would bite.

However, Turkey has now moved away from being a hiper-inflationary environment, so its risk premium has fallen and interest rates have also fallen as a result of global reductions in the cost of borrowing.

Useful Excel Function for Actuaries


How many times have you had to set up a complicated nested "if" formula to calculate the policy year or month applying, or the policyholders age at entry? These type of calculations are needed by actuaries as we calculate the correct premium for an application, or the mathematical reserve at a set time, or the period to discount emerging profits in an Embedded Value calculation.

Hint: A little known function in excel calculates the difference between two dates in days, or months, or years.

DATEDIF(date1;date2;period) returns the difference between date1 and date2 as follows:

Turkey's First "Stajyer Aktüer"


The Treasury has announced the results of the most recent actuarial examinations, and as a result 8 young actuarial students have won the right under the new Actuarial Regulations to use the title Aktüer Stajyer (Actuarial Intern).

29 students passed the exam in Financial Mathematics.

21 passed Probability and Statistics.

23 entrants were successful in Basic Insurance and Economics

and 26 passed the Maths exam.

Congratulations to Max Steinbuchel!


"Unfair!" we all complained when the tax rules applying to Life Insurance were changed in 2001. Unlike all other forms of investment, where tax only applies to the actual income portion - i.e. the excess of the proceeds of the investment over the original amount invested, for policies purchased after 7 October 2001 the new tax regime meant that the whole of the maturity benefit payable from a life policy would be subject to tax.

For policies that complete ten years: 10% of the policy proceeds are tax free; the rest is taxed at a 10% stoppage rate.

For surrenders before ten years: the full policy proceeds are taxed at a 15% stoppage rate.

You have (not) won the Microsoft Lottery!


For years I have been receiving emails from lawyers in Nigeria, or people I have never met in Ghana who address me as “dearly beloved”, informing me they would like my help in obtaining a legacy, or that money can be donated to a charity of my choice. I often wonder whether such fraudsters think that the public in Turkey is more gullible than that in the UK, but then I hear from my brother that he gets as many of these spam messages as I do. 

If the Microsoft Lottery were to feature in an actuarial Introduction to Statistics exam paper, the question would go something like this: what is the probability of winning 5,000,000 pounds this week in a lottery for which you have never in your life bought a ticket?

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