T
Trevor
Member
Hi,
I have a question about explaining basic calculations. Some of the exam questions involve an audience, perhaps a policyholder is unhappy about a premium increase in their policy. In certain cases, they would ask for a full explanation about it or to recalculate them.
Regardless of the technical skills of the audience, do we need to include a high-level proof of how the premium increase is derived?
I thought this will be helpful for the reader because we will convince them where did the increase came from, and numerical examples will prove the calculation is correct.
I understand that including too much technical information will confuse them, so we need to keep it brief and simple. However it may be hard to reconcile the numbers without going more in detail. One example is the 2014 CA3 paper (Witten - XYZ Compulsary Insraunce).
In this case, a finance director is unhappy that the premium increased 9 folds.
A simple approach is to pick up the most significant parts of the increase, and then show that these roughly compound up to 9 times. However, if we do a simplified calculation, we can only calculate something that shows a 15 times increase. I thought this is unacceptable because the reader will not trust our calculation being double of what they see. But the examiner report mentions roughly 15 times increase, and say "the premium is correct".
Can I know if we actually need to roughly derive the premium increase, or it would be sufficient to explain the source?
I have a question about explaining basic calculations. Some of the exam questions involve an audience, perhaps a policyholder is unhappy about a premium increase in their policy. In certain cases, they would ask for a full explanation about it or to recalculate them.
Regardless of the technical skills of the audience, do we need to include a high-level proof of how the premium increase is derived?
I thought this will be helpful for the reader because we will convince them where did the increase came from, and numerical examples will prove the calculation is correct.
I understand that including too much technical information will confuse them, so we need to keep it brief and simple. However it may be hard to reconcile the numbers without going more in detail. One example is the 2014 CA3 paper (Witten - XYZ Compulsary Insraunce).
In this case, a finance director is unhappy that the premium increased 9 folds.
A simple approach is to pick up the most significant parts of the increase, and then show that these roughly compound up to 9 times. However, if we do a simplified calculation, we can only calculate something that shows a 15 times increase. I thought this is unacceptable because the reader will not trust our calculation being double of what they see. But the examiner report mentions roughly 15 times increase, and say "the premium is correct".
Can I know if we actually need to roughly derive the premium increase, or it would be sufficient to explain the source?