Study of Volatility Stochastic Processes in the Context of Solvency Forecasting for Sri Lankan Life Insurers

Abstract

The main business of Life Insurers is Long Term contractual obligations with a typical lifetime of 20 -40 years. Therefore, the Solvency metric is defined by the adequacy of capital to service the cash flow requirements arising from the said obligations. The main component inducing volatility in Capital is market sensitive Assets, such as Bonds and Equity. Bond and Equity prices in Sri Lanka are highly sensitive to macro-economic elements such as investor sentiment, political stability, policy environment, economic growth, fiscal stimulus, utility environment and in the case of Equity, societal sentiment on certain companies and industries. Therefore, if an entity is to accurately forecast the impact on solvency through asset valuation, the impact of macroeconomic variables on asset pricing must be modelled mathematically. This paper explores mathematical, actuarial and statistical concepts such as Brownian motion, Markov Processes, Derivation and Integration as well as Probability theorems such as the Probability Density Function in determining the optimum mathematical model which depicts the accurate relationship between macro-economic variables and asset pricing.

Ekonomi Kreatif Berbasis Wana Wisata Sumber Biru dalam Meningkatkan Pendapatan Di Desa Wonomerto Wonosalam Jombang.

“…Wawancara secara mendalam serta terstruktur harus digunakan dalam proses penelitian mengginakan metode kualitatif sehingga dalam melaksanakan pengumpulan data tidak hanya mengeksplorasi serta mengetahui tentang wisata makanan dan cara pengembangkannya, tapi juga ditekankan kepada penggalian pentingnya inovasi wisata kuliner yang mendukung pengembangan industry pariwisata (Ashika Mendis, 2021). Lain daripada itu, wawancara bisa membantu untuk memahami kaitan antar objek penelitian, seperti yang ditetapkan dari metode deskriptif yang mana objek penelitian diteliti langsung di lapangan.…”

“…Data utama ialah data yang dikumpulkan guna dipertanyakan saat survei tertentu dengan menggunakan teknik yang paling tepat untuk menjawab pertanyaan survei. Data yang diperoleh ditambahkan ke repositori keadaan social yang ada di setiap kesempatan pengumpulan data primer (Hox & Boeije, 2005).…”