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Insurance stufffor DataGeeks Dr. Ben Flood [email protected] — 2017-11-23

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2 © [year] [legal member firm name], a [jurisdiction] [legal structure] and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved. Document Classification: KPMG Confidential 1The Product p. 3 4Lapse p. 6 2Death p. 4 5Financial (1 & 2) p. 7 Contents 3Longevity p. 5 6Nested Stochastic p. 9

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3 © [year] [legal member firm name], a [jurisdiction] [legal structure] and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved. Document Classification: KPMG Confidential The Product: Annuity Guarantee Account Monthly Payments Accumulation Phase Annuity Phase

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4 © [year] [legal member firm name], a [jurisdiction] [legal structure] and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved. Document Classification: KPMG Confidential Death

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5 © [year] [legal member firm name], a [jurisdiction] [legal structure] and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved. Document Classification: KPMG Confidential Longevity

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6 © [year] [legal member firm name], a [jurisdiction] [legal structure] and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved. Document Classification: KPMG Confidential Lapse Expected Lapse Dynamic Lapse Mass Lapse

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7 © [year] [legal member firm name], a [jurisdiction] [legal structure] and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved. Document Classification: KPMG Confidential Financial: CostofCapital • Question: How much money do I need to keep in my back pocket to be allowed to run the business? • Answer: To be able to survive the worst 1 year in 20, every year. • Question: How much does my business have to pay for that? • Answer: Roughly 6%

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8 © [year] [legal member firm name], a [jurisdiction] [legal structure] and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved. Document Classification: KPMG Confidential Financial: EconomicScenarios Need to project my account balance Real World Risk Neutral Best Estimate A: What I think will happen in the market B: How I think the market will price what I think Market Consistent C: Really hard to estimate D: Magic formula to make my value consistent with prices of market instruments

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9 © [year] [legal member firm name], a [jurisdiction] [legal structure] and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved. Document Classification: KPMG Confidential NestedStochastics

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Thankyou Dr. Ben Flood [email protected]