Life insurance and annuity valuation

Life insurance and annuity valuation

Bachelor of Business Studies (BBS) — Fourth Year

Subject: Management of Financial Institutions (FIN 255)

Unit 7: Insurance Companies

Academic Year: 2083/84

Topic Objectives

After studying this topic, students should be able to:

• Explain the scope and key elements of life insurance and annuity valuation.
• Apply the relevant financial concepts or calculations and explain their assumptions, risks and analytical limits.

Curriculum Scope

• Overview of insurance companies
• Life insurance companies
• Types of life insurance companies, Fair value computation of annuity insurance policy

Detailed Microsyllabus

1. Life insurance

   1. Institution types and principal functions.
   2. Policy and annuity cash flows.
   3. Contractual assumptions.

2. Annuity valuation

   1. Use prescribed payments, discounting and contingent assumptions.
   2. Calculate the required fair-value estimate.
   3. Explain sensitivity and model limitations.

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Curriculum reference: Tribhuvan University, Faculty of Management, revised four-year BBS curriculum, PDF pages 86–88.

Source note: The curriculum scope above is retained from the existing TU syllabus breakdown. The numbered study subtopics are editorial elaborations for teaching and study, rather than a separately issued TU syllabus. Unit or component allocations apply at their stated level; no separate topic hours or marks are assigned here. Examples involving current laws, rates, institutional products or Nepalese status must identify the relevant period and official materials; no changing numerical or legal requirements are invented here.