Module: Life Contingencies

Latest Module Specifications

Current Academic Year 2025 - 2026

Module Title	Life Contingencies
Module Code	MTH1002 (ITS: MS424)
Faculty	Mathematical Sciences	School	Science & Health
NFQ level	8	Credit Rating	7.5

Description

MS448 aims to provide students with an understanding of the characteristics of annuity and assurance contracts in the market. The module aims to develop students’ abilities to calculate premiums, reserves and profits for annuity and assurance contracts. The module will use Excel to apply the theory to practical applications.

Learning Outcomes

1. LO1 Understand various annuity and assurance contracts – conventional, unit linked and with profit type contracts – and the relationships between them for single life and multiple life cases.
2. LO2 Use life table functions to evaluate expected present values of contingent benefits and solve equations of value.
3. LO3 Develop Markov models and multiple decrement models to evaluate contracts involving multiple transition events and dependent probabilities.
4. LO4 Calculate gross premium and gross premium reserves for assurance and annuity contracts.
5. LO5 Calculate mortality profit for assurance and annuity contracts.
6. LO6 Profit test assurance and annuity contracts using projected expected future cashflows and use for pricing and reserving purposes.

*Type*	*Hours*	*Description*
Workload	Full time hours per semester
Lecture	36	Presentation of course material
Laboratory	8	Practical computer labs in Excel – mixture of presentations and students working from supplied lab sheets
Tutorial	12	Working from supplied tutorial sheets
Independent Study	132	Revising coursework, solving tutorial and lab sheets
Total Workload: 188

Section Breakdown
CRN	20037	Part of Term	Semester 2
Coursework	0%	Examination Weight	0%
Grade Scale	40PASS	Pass Both Elements	Y
Resit Category	RC1	Best Mark	N
Module Co-ordinator	Michael Marsh	Module Teacher

Type	Description	% of total	Assessment Date
Assessment Breakdown
In Class Test	End of semester Excel lab exam –duration 1 hour	25%	n/a
Formal Examination	End-of-Semester Final Examination	75%	End-of-Semester

Reassessment Requirement Type
Resit arrangements are explained by the following categories; RC1: A resit is available for both^* components of the module. RC2: No resit is available for a 100% coursework module. RC3: No resit is available for the coursework component where there is a coursework and summative examination element. ^* ‘Both’ is used in the context of the module having a coursework/summative examination split; where the module is 100% coursework, there will also be a resit of the assessment

Pre-requisite	None
Co-requisite	None
Compatibles	None
Incompatibles	None

All module information is indicative and subject to change. For further information,students are advised to refer to the University's Marks and Standards and Programme Specific Regulations at: http://www.dcu.ie/registry/examinations/index.shtml

Indicative Content and Learning Activities

Annuity and Assurance Contracts
Common annuity and assurance contracts. Level and increasing benefits. With-profit contracts – reversionary and terminal bonuses. Unit-linked contracts. Accumulating with-profit contracts.

Life Tables
Life table functions and probabilities. Payments in advance and in arrears; Means and variances of expected present values. Expected accumulations.

Pricing and Reserving
Gross future loss random variable. Expenses. Gross premium and gross premium reserve calculations. Prospective and Retrospective reserves and the relationship between them.

Multiple Life Contracts
Joint life, last survivor, first death and reversionary contracts.

Multiple Decrement and Multiple Life Models
Transition intensities and transition probabilities. Markov models and multiple decrement models. Three state Able/Ill/Dead model.

Mortality Profit
Calculation of death strain at risk, actual and expected death strain and the mortality profit for common annuity and assurance contracts.

Cashflow Projections
Project expected future cashflows for common annuity and assurance type contracts for profit testing, pricing and reserving purposes. Zeroisation of negative cashflows.

Excel Models
Develop Excel models of common annuity and assurance contracts for pricing and reserving purposes. Use Excel for cashflow projections and for profit testing purposes.

Indicative Reading List

Books:

Acted: 0, CM1 Combined Materials Pack,

Articles:

Acted: 0, CM1 Combined Material Pack,

Other Resources

None