Description: Although rate structures where low-cost cohorts subsidize high cost cohorts may be justified from a actuarial, marketing, or legal standpoint, the subsidization creates risks which must be understood and monitored. This article presents the concept of subsidization signature to measure and interpret the effects of rate subsidization, and to assess the sustainability of rating structures and the sensitivity of business mix assumptions.

Description: This article discusses challenges that short-term predictions have on actuaries' reputations, both as individuals and as a profession, and discusses strategies to improve our professionalism and better manage this risk.