SDST4903 Actuarial techniques for general insurance (6 credits) Academic Year 2025
Offering Department SCDS (Department of Statistics and Actuarial Science) Quota ---
Course Co-ordinator Dr D Lee, SCDS (Department of Statistics and Actuarial Science) < leedav@hku.hk >
Teachers Involved (Dr D Lee,Statistics & Actuarial Science)
Course Objectives The purpose of this course is to develop knowledge of the basic techniques for ratemaking and estimating claim liabilities for general insurance. Application of the actuarial techniques to resolve general insurance problems will be emphasized.  The course also provides general knowledge on the general insurance market in Hong Kong. Students will acquire the fundamental concept on general insurance actuarial science together with the supporting calculations.
Course Contents & Topics 1.  General insurance market in Hong Kong
-  Introduction of general insurance markets
-  Regulations on general insurance

2.  Basic techniques for ratemaking
-  Techniques related to exposures
-  Techniques related to premiums
-  Techniques related to loss and loss adjustment expenses
-  Calculate the underwriting expense provisions
-  Pure premium methods
-  Loss ratio methods
-  Considerations when selecting the final rates

3.  Estimating claim liabilities
-  Data requirement
-  Build and analyze claim development triangles
-  Expected claims method
-  Frequency-severity methods
-  Bornhuetter-Ferguson and Benktander methods
-  Appraisal and validation of the estimated results
Course Learning Outcomes
On successful completion of this course, students should be able to:

CLO 1 describe the features and underlying risks of general insurance products
CLO 2 use appropriate techniques to adjust premium, exposure and expense data for use in ratemaking procedures
CLO 3 calculate the premium rate for basic general insurance products
CLO 4 estimate the claims liabilities for general insurance products
Pre-requisites
(and Co-requisites and
Impermissible combinations)		 Pass in SDST3906, or already enrolled in this course.
Only for students admitted in 2025 and thereafter.
Course Status with Related Major/Minor /Professional Core 2U000C00 Course not offered under any Major/Minor/Professional core
2024 BSc in Actuarial Science ( Disciplinary Elective )
2024 Minor in Actuarial Studies ( Disciplinary Elective )
2023 BSc in Actuarial Science ( Disciplinary Elective )
2023 Minor in Actuarial Studies ( Disciplinary Elective )
2022 BSc in Actuarial Science ( Disciplinary Elective )
2022 Minor in Actuarial Studies ( Disciplinary Elective )
2021 BSc in Actuarial Science ( Disciplinary Elective )
2021 Minor in Actuarial Studies ( Disciplinary Elective )
Course to PLO Mapping 2024 BSc in Actuarial Science < PLO 2,3,4,5,6 >
2023 BSc in Actuarial Science < PLO 2,3,4,5,6 >
2022 BSc in Actuarial Science < PLO 2,3,4,5,6 >
2021 BSc in Actuarial Science < PLO 2,3,4,5,6 >
Offer in 2025 - 2026 Y        1st sem    Examination Dec     
Offer in 2026 - 2027 Y
Course Grade A+ to F
Grade Descriptors
A Demonstrate thorough mastery at an advanced level of extensive knowledge and skills required for attaining all the course learning outcomes. Show strong analytical and critical abilities and logical thinking, with evidence of original thought, and ability to apply knowledge to a wide range of complex, familiar and unfamiliar situations. Apply highly effective organizational and presentational skills.
B Demonstrate substantial command of a broad range of knowledge and skills required for attaining at least most of the course learning outcomes. Show evidence of analytical and critical abilities and logical thinking, and ability to apply knowledge to familiar and some unfamiliar situations. Apply effective organizational and presentational skills.
C Demonstrate general but incomplete command of knowledge and skills required for attaining most of the course learning outcomes. Show evidence of some analytical and critical abilities and logical thinking, and ability to apply knowledge to most familiar situations. Apply moderately effective organizational and presentational skills.
D Demonstrate partial but limited command of knowledge and skills required for attaining some of the course learning outcomes. Show evidence of some coherent and logical thinking, but with limited analytical and critical abilities. Show limited ability to apply knowledge to solve problems. Apply limited or barely effective organizational and presentational skills.
Fail Demonstrate little or no evidence of command of knowledge and skills required for attaining the course learning outcomes. Lack of analytical and critical abilities, logical and coherent thinking. Show very little or no ability to apply knowledge to solve problems. Organization and presentational skills are minimally effective or ineffective.
Communication-intensive Course N
Course Type Lecture-based course
Course Teaching
& Learning Activities
Activities Details No. of Hours
Lectures 36.0
Tutorials 12.0
Reading / Self study 100.0
Assessment Methods
and Weighting
Methods Details Weighting in final
course grade (%)		 Assessment Methods
to CLO Mapping
Assignments Coursework (assignments, tutorials, and a class test) 25.0 1,2,3
Examination One 3-hour written examination 75.0 2,3
Required/recommended reading
and online materials		 Friedland, J.F., Estimating Unpaid Claims Using Basic Techniques, Casualty Actuarial Society, Third Version, July 2010
Werner, G, and Modlin, C., Basic Ratemaking, Casualty Actuarial Society, Fifth Edition, May 2016
Brown, R.L. and Lennox, W.S., Introduction to Ratemaking and Loss Reserving for Property and Casualty Insurance, ACTEX Publications, Fifth edition, 2022
Course Website http://moodle.hku.hk
Additional Course Information NIL