KARATINA UNIVERSITY

SCHOOL OF PURE AND APPLIED SCIENCES

DEPARTMENT OF MATHEMATICS, STATISTICS & ACTUARIAL SCIENCE
COURSE OUTLINE
Course Code: ACS 311
Course Title: ACTUARIAL MATHEMATICS I
Program(s): BSC in Actuarial Science
Year and semester Y3S1
Lecturer Name: Dr. Irene Irungu
Lecturer Contacts: Email: iwaithira@karu.ac.ke
Phone No.: 0723 897 461

Expected Learning Outcomes:

By the end of the course, the learner should be able to:
i. Describe and calculate, using ultimate or select mortality, premiums of assurance
contracts.
ii. Describe prospective and retrospective reserves
iii. Describe the calculation, using ultimate or select mortality, of net premiums and
net premium reserves for increasing and decreasing benefits and annuities
iv. Calculate net premiums and net premium reserves for with profits contracts
v. Describe the calculation of gross premiums and reserves of assurance and annuity
contracts

Course Content
Premiums: Notation for premiums, Principles of premium calculations, Premiums
allowing for expenses, with profits policies and combined insurance-annuity benefits,
Fractional period premiums. Reserves: Introduction to reserves, Prospective,
Retrospective, Net premium, Gross premium and Zillmerised reserves for without and
with-profits policies, Fractional period reserves. Application of Reserves: Surrender
values, Policy Alterations and Conversions, actual and expected death strains, Mortality
profit and loss. Paid-up policy values: policies with annual cash flows, at discrete
intervals other than annually, with continuous cash flows using Thiele’s differential
equation. Exra risks: Constant and Variable addition to the force of mortality, Rating up
and Liens.
Lecture Schedule

Page 1 of 3
WEEK TOPIC SUB-TOPIC REQUIREMENTS
1 Introduction  Description of course content
and course purpose
2 Evaluating  Evaluation of assurance
Assurances benefits
 Evaluation of annuity benefits
 Premium conversion
3 Evaluating  EPV of annuities payable m Actuarial Tables and
Assurances times per year Calculator
 EPV under constant force of
mortality
4 Variable benefits  Payments varying at a Actuarial Tables and
policies constant compound rate Calculator
 Payments varying by a
constant monetary amount
5 Conventional  Simple bonus Actuarial Tables and
with-profits  Compound bonus Calculator
policies  Super-Compound bonus
6 CAT ONE  CAT ONE Actuarial Tables and
Calculator
7 Gross Premium  Gross premium for assurances Actuarial Tables and
 Gross future loss random Calculator
variable
8 Gross Premium  Principle of Equivalence Actuarial Tables and
 Premium basis and structure Calculator
 Conventional with-profit
contracts
 Premium Payable m times per
year
9 Gross Premium  Prospective reserves Actuarial Tables and
Reserve  Retrospective reserves Calculator
 Relationship between
Prospective and Retrospective
reserves
10 Gross Premium  Relationship between reserves Actuarial Tables and
Reserve for annual premium contracts Calculator
 Net Premium Reserves
11 CAT TWO  CAT TWO Actuarial Tables and
Calculator
12 Mortality Profit  Mortality profit for a single Actuarial Tables and
policy Calculator
 Mortality profit for a portfolio
of policies
13 Mortality Profit  Allowing for death benefit Actuarial Tables and
 Allowing for survival benefit Calculator
14 Students revision
15-16 End of Semester Examination Actuarial Tables and
Calculator
Page 2 of 3
Main Text Book

a) Promislow, S. D. (2010). Fundamentals of Actuarial Mathematics. Chichester, West

Sussex, U.K.: Wiley. Available at http://opac.karu.ac.ke

b) Bowers, N.L. (1997). Actuarial Mathematics. Schaumburg: Society of Actuaries.

Available at http://opac.karu.ac.ke

c) Institute of Actuaries. (2013). CT5 (Life Assurance) Notes. Acted. London.

Lecturer Dr. Irungu Sign: Irene Irungu… Date: 9th Aug, 2020

Was the course outline issued on the first lecture? Yes No

Class Rep _______________ Sign: __________________ Date: ________________

Approved for circulation by:

HOD_______________ Sign: __________________ Date: ________________

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