I was going through the worked example on modelling reinsurance with fluctuations reserves as given on pages 14-15 of Chapter 25: Reinsurance (2). Point #8 mentions that \(X\) is now calculated as: \[ X = [C(g) - C'(r)] - [P(g) - P(r)] - M] \] However, in the preceding point #7, it says: Hence, shouldn't we have \(0.4P(r)\) in the equation for \(X\) above instead of \(P(r)\). That is to say, the expression should be: \[ X = [C(g) - C'(r)] - [P(g) - 0.4P(r)] - M] \] Is there anything that I am missing out here?
Hi: see previous thread (from quite a few years ago!) https://www.acted.co.uk/forums/index.php?threads/mortality-fluctuation-reserve.5502/