[[Actuarial Notes Wiki|Wiki]] / **Exam 9 (CAS)** ## Exam 9 (CAS) The **Risk Management for Actuaries (Exam 9)** is a 4 hour exam covering catastrophe modeling, reinsurance pricing, financial risk management, and enterprise risk management. <div class="callout-cols-2"> > [!answer]- 📅 Exam Schedule {2026} > > <div class="highlight-upcoming" data-date-col="0"></div> > > Dates | Exam > -|- > Apr 14 - Apr 21 | 9 > Oct 19 - Oct 27 | 9 > > - [Register](https://www.casact.org/exams-admissions/exam-registration) ($850 USD registration fee) > [!answer]- 📄 Download Resources {1 PDF} > - [Exam 9 Content Outline](https://www.casact.org/exam/exam-9-risk-management-actuaries) </div> >[!answer]- 📕 Source Material {8 Sources} > > | Source | Tasks | > | --- | --- | > | [[Swiss Re Exposure Curves and the MBBEFD Distribution Class (Bernegger - 1997)]] | A1 | > | [[Enterprise Risk Analysis for Property and Liability Insurance Companies (Brehm et al.)]] | D1-D6 | > | [[Basics of Reinsurance Pricing (Clark - 2014)]] | A2-A3 | > | [[The Economics of Structured Finance (Coval, Jurek, and Stafford - 2009)]] | C5-C6 | > | [[Allocation of Capital in the Insurance Industry (Cummins - 2000)]] | C1-C4 | > | [[CAT Bonds and Other Risk-Linked Securities (Cummins - 2008)]] | C7 | > | [[Catastrophe Modeling: A New Approach to Managing Risk (Grossi and Kunreuther - 2005)]] | A4-A5 | > | [[Pricing Insurance Risk: Theory and Practice (Mildenhall and Major - 2022)]] | B1-B5, C1-C4^[Domain B: Chapters 3 (excl. 3.5), 4 (excl. 4.2.6, 4.3.9, 4.4), 5, 6, 8 (§8.5, 8.7), 9 (excl. 9.3, 9.4), 10, 11 (excl. 11.2.3, 11.3.4–11.3.7, 11.6). Domain C: Chapters 2 (§2.1–2.2), 8 (§8.1–8.4, 8.6, 8.9), 12 (excl. 12.4), 13, 14 (excl. 14.4–14.5), 15 (excl. 15.4.3–15.4.4). Proofs and Appendices not tested.] | > | [[Managing Interest Rate Risk: ALM, Franchise Value, and Strategy (Panning - 2006)]] | C3, C5 | ### Learning Objectives > [!example]- A. Catastrophe and Reinsurance {25-35%} > ### A. Catastrophe and Reinsurance > Interpret methods used to model losses due to catastrophic events for the purpose of generating a [[Catastrophe Expected Loss Cost]]. Manage total exposure from catastrophic events within an insurance portfolio. Apply current and historical methods used to price [[Reinsurance]] contracts. > 1. Fit loss distribution-based [[Exposure Curves]]. > 2. Determine the [[Loss Cost]] of various types of reinsurance contracts (e.g., [[Excess of Loss]], [[Quota Share]], [[Surplus Share]], treaty, [[Aggregate Excess of Loss]], and facultative). > 3. Determine the effect of common contract provisions (e.g., [[Reinstatements]], [[Loss Corridors]], clash covers, profit and [[Sliding Scale Commissions]]) on the loss cost of reinsurance contracts. > 4. Evaluate [[Catastrophe Models]]. > 5. Apply catastrophe models to ratemaking. > > **Readings:** Swiss Re Exposure Curves and the MBBEFD Distribution Class · Basics of Reinsurance Pricing · Catastrophe Modeling: A New Approach to Managing Risk > [!example]- B. Risk and Return {20-30%} > ### B. Risk and Return > Define, compare, select, and apply appropriate [[Risk Measures]] to compute a risk-loaded technical premium. Evaluate the economic value of insurance cash flows reflecting the [[Time Value of Money]]. Explain and apply the insurance concepts of margin, return, and leverage. > 6. Define and apply [[Risk Taxonomies]] and the concept of a [[Risk Measure]]. > 7. Calculate and compare financial risk using risk measures. > 8. Evaluate the economic value of insurance cash flows reflecting the [[Time Value of Money]]. > 9. Determine [[Risk Loads]] for insurance pricing. > 10. Assess insurance profitability (return, margin, leverage). > > **Readings:** Pricing Insurance Risk: Theory and Practice (Chapters 3–11) > [!example]- C. Financial Risk Management (FRM) {20-30%} > ### C. Financial Risk Management (FRM) > Describe and explain the need, purpose, design, and execution of insurer [[Financial Risk Management]] (FRM). Perform calculations to allocate the [[Cost of Capital]], estimate risk-adjusted prices, and evaluate economic performance by line or unit. > 11. Describe and explain the financial risk and [[Capital Structure]] of insurers, the [[Cost of Capital|cost of insurance capital]], and the impact of insurance market imperfections. > 12. Allocate the cost of [[Risk Capital]] to business units or lines of business. > 13. Set prices for insurance policies on a [[Risk-Adjusted Pricing|risk-adjusted basis]]. > 14. Assess [[Risk-Adjusted Performance]] of business units or lines of business. > 15. Estimate and manage [[Interest Rate Risk]] and [[Credit Risk]] (e.g., default, prepayment, reinsurance). > 16. Describe and apply the basics of [[Structured Finance]]. > 17. Describe and apply [[Securitization]] and its applications to the management of catastrophe risk (e.g., [[CAT Bonds]], [[Insurance-Linked Securities]]). > > **Readings:** The Economics of Structured Finance · Allocation of Capital in the Insurance Industry · CAT Bonds and Other Risk-Linked Securities · Pricing Insurance Risk: Theory and Practice (Chapters 2, 8, 12–15) · Managing Interest Rate Risk: ALM, Franchise Value, and Strategy > [!example]- D. Enterprise Risk Management (ERM) {15-25%} > ### D. Enterprise Risk Management (ERM) > Define and explain [[Enterprise Risk Management]] (ERM), including model selection and calculations necessary to implement a realistic program. Describe the relationship between ERM and the overall risk that a business faces, and the impact of different ERM tools on business risk and strategy. > 18. Determine [[Operational Risk|operational risks]]. > 19. Analyze insurance and financial risk quantitatively. > 20. Determine the effect of [[Risk Measures]] and [[Risk Modeling]] on [[Strategic Management]]. > 21. Select models to manage diverse risks. > 22. Develop [[Risk Mitigation]] strategies. > 23. Assess effectiveness of risk mitigation strategies. > > **Readings:** Enterprise Risk Analysis for Property and Liability Insurance Companies