Dear All Hope you are well. Please can I confirm when we account for inflation for ILF that we count number of years of inflation from current ILF date to the new policy commencement date (NOT the claims payment date) for which the new ILF would be applicable? eg 2015 Sept. Q2, here inflation is counted from 1st Jan 2012 (when ILF was used for) to 1st Oct 2015 (contract that commences on 1 October 2015.) eg 2010 April Q5, here we assumed mid policy year (ILF curve was specifically built for calendar 2009) to mid policy year ( price a three-year contract starting on 1 January 2011) , so (1/7/09) - (1/7/12) Many thanks Jun
Hi Jun Yes. Just be careful whether the question refers to a date or a period of time. Q2 2015 Sept reads " contracts written 1 January 2012". so we have a specific date and use the policy inception date. Q5 2010 April reads " the ILF curve was built specifically for calendar year 2009" so we have a period of time. we took the midpoint assuming policies are sold uniformly throughout the year.
