Numerical example anyone?
Hi there, I have read this method over and over again but I still don't understand it fully.
Can someone please give a working example of how the bonus will be calculated(!) for a policy following revalorisation method, from first principles? I am assuming it will follow the usual route, I.e. 'r' the excess of actual experience over assumed factors in valuation(?), the factors being mortality, expense etc in our bases.
Hence, r would equal the ratio of existing reserve & the calculated bonus.
Or is this percentage pre-decided ( probably at pricing stage by an actuary) and could only change under worse experience due to PRE?
Many thanks
Last edited by a moderator: Sep 23, 2013