• We are pleased to announce that the winner of our Feedback Prize Draw for the Winter 2024-25 session and winning £150 of gift vouchers is Zhao Liang Tay. Congratulations to Zhao Liang. If you fancy winning £150 worth of gift vouchers (from a major UK store) for the Summer 2025 exam sitting for just a few minutes of your time throughout the session, please see our website at https://www.acted.co.uk/further-info.html?pat=feedback#feedback-prize for more information on how you can make sure your name is included in the draw at the end of the session.
  • Please be advised that the SP1, SP5 and SP7 X1 deadline is the 14th July and not the 17th June as first stated. Please accept out apologies for any confusion caused.

Equality of retrospective and prospective reserves proof

D

Danny

Active Member
Core reading, pp. 742. Proof of equality of reserves, whole life assurance example.

The proof makes sense to me, other than that where the IFoA say 'Rearranging the terms, we will obtain the expression for the retrospective reserve'.

It is not obvious to me how these terms are rearranged to get the expression for the retrospective reserve. Could you explain the relationship between the 'modified equation' and the retrospective reserve equation, and why/how the terms can be rearranged to yield this?
 
It's similar to the alternative way of approaching it, which is presented on page 28 of Chapter 20 of ActEd's course notes. But if you group the terms with the same multipliers together, eg the two terms with S together, and then simplify you'll end up with the terms in the retrospective formula.
 
You must log in or register to reply here.
Back
Top