Simon Fraser University
Engaging the World

Course Outlines

Spring 2026 - RISK 422 E100

Short-Term Insurance Practice (3)

Class Number: 6231

Delivery Method: In Person

Overview

  • Course Times + Location:

    Jan 5 – Apr 10, 2026: Thu, 5:30–8:20 p.m.
    Burnaby

  • Exam Times + Location:

    Feb 12, 2026
    Thu, 5:30–8:20 p.m.
    Burnaby

    Mar 26, 2026
    Thu, 5:30–8:20 p.m.
    Burnaby

    Apr 25, 2026
    Sat, 8:30–11:30 a.m.
    Burnaby

  • Prerequisites:

    RISK (or ACMA) 321 with a minimum grade of C.

Description

CALENDAR DESCRIPTION:

Advanced ratemaking: trend analysis, ultimate losses, expense provisions, profit and contingencies, overall rate indications, classification rates. Experience rating: credibility theory and applications, bonus-malus systems. Loss reserving: estimating unpaid losses and IBNR, statistical models and assumptions for outstanding claim reserves. Students with credit for ACMA 422 or ACMA 470 may not take this course for further credit. Quantitative.

COURSE DETAILS:

This course introduces the fundamentals of Property & Casualty (P&C) insurance and the actuarial techniques used in short-term insurance pricing and reserving. The material aligns with concepts from the CAS Exam 5 syllabus and selected topics from the SOA Advanced Short-Term Actuarial Mathematics (ASTAM) exam. The course includes practical P&C projects that allow students to apply these concepts to real-world actuarial pricing and reserving scenarios.

Topics Covered:

  • Introduction to P&C
    • Overview of the P&C insurance industry
    • Common coverages and products
    • Key terminology used in pricing and reserving
  • Ratemaking:
    • Ratemaking fundamentals: exposures, premiums, and data organization
    • Overall rate indications
      • Premiums (on-levelling, trending)
      • Loss & LAE (adjustments to losses, trending, development)
      • Expense Provisions & Profit and Contingencies
      • Construct overall rate indication (pure premium & loss ratio methods)
    • Segmentation
      • Concepts: Adverse Selection, Univariate Selection, Multivariate Selection, Bonus-Malus
      • Credibility
      • Classification Rating
      • Practical and Considerations & Rate Implementation
    • Reserving:
      • Loss reserving fundamentals: data organization, homogeneity, and triangle setup
      • Estimating unpaid losses and IBNR using the following techniques: Chain-Ladder, Expected claim, Bornhuetter-Ferguson, Frequency/Severity
      • Estimate unpaid losses and IBNR using statistical models: Bayesian, Mack, Poisson & ODP
    • Other Topics (Time Permitting)

COURSE-LEVEL EDUCATIONAL GOALS:

By the end of the course, students will be able to:

  1. Apply foundational ratemaking concepts to organize P&C insurance data, adjust historical experience, and develop overall rate level indications using industry-standard actuarial methods.
  2. Evaluate and estimate unpaid losses and IBNR using core reserving techniques, interpret development patterns, and assess the reasonableness of reserve estimates.
  3. Develop the practical and conceptual background required for starting a career in P&C actuarial work and for progressing toward professional exams, including CAS Exam 5 and SOA Exam ASTAM.

Grading

  • Projects 25%
  • Midterm Exam 1 20%
  • Midterm Exam 2 20%
  • Final Exam 35%

NOTES:

Above grading is subject to change.

Materials

REQUIRED READING:

Basic Ratemaking, 5th Ed. Werner, G., and Modlin, C. (May 2016). Casualty Actuarial Society. 

Textbook available at https://www.casact.org/sites/default/files/2021-03/5_Werner_Modlin.pdf.

Errata available at https://www.casact.org/sites/default/files/2024-07/2024_Exam_5_Werner_Errata_2024_06_27.pdf.

Estimating Unpaid Claims Using Basic Techniques, 3rd. Version. Friedland, J.F. (July 2010). Casualty Actuarial Society.

Available at https://www.casact.org/sites/default/files/2021-03/5_Friedland.pdf.

REQUIRED READING NOTES:

Your personalized Course Material list, including digital and physical textbooks, are available through the SFU Bookstore website by simply entering your Computing ID at: shop.sfu.ca/course-materials/my-personalized-course-materials.

Registrar Notes:

ACADEMIC INTEGRITY: YOUR WORK, YOUR SUCCESS

At SFU, you are expected to act honestly and responsibly in all your academic work. Cheating, plagiarism, or any other form of academic dishonesty harms your own learning, undermines the efforts of your classmates who pursue their studies honestly, and goes against the core values of the university.

To learn more about the academic disciplinary process and relevant academic supports, visit: 


RELIGIOUS ACCOMMODATION

Students with a faith background who may need accommodations during the term are encouraged to assess their needs as soon as possible and review the Multifaith religious accommodations website. The page outlines ways they begin working toward an accommodation and ensure solutions can be reached in a timely fashion.