Hello,
I have few doubts in the surplus analysis process when we use the new non economic assumptions.
1. The relevant part from Core Reading is below-
Run the adjusted model with the new non-economic assumptions to obtain the impact on the surplus from these assumption changes. Ideally, the assumptions should only be changed from the new valuation date so that experience variances are relative to the start-year best estimates.
Can someone please explain the part in bold? How does 'Taking this approach to the process will enable the company to identify ‘changes to insurance assumptions’ as a separate item from ‘insurance variances’.
2.
Adjust the rolled-forward balance sheet for known differences between actual and modelled non-economic experience over the inter-valuation period (eg if it is known that expenses over the year were higher than expected).
Is it referring to purely A/E adjustment? How is this applied to the surplus before we allow for capital injections in the next step of surplus analysis?
Thank you!
I have few doubts in the surplus analysis process when we use the new non economic assumptions.
1. The relevant part from Core Reading is below-
Run the adjusted model with the new non-economic assumptions to obtain the impact on the surplus from these assumption changes. Ideally, the assumptions should only be changed from the new valuation date so that experience variances are relative to the start-year best estimates.
Can someone please explain the part in bold? How does 'Taking this approach to the process will enable the company to identify ‘changes to insurance assumptions’ as a separate item from ‘insurance variances’.
2.
Adjust the rolled-forward balance sheet for known differences between actual and modelled non-economic experience over the inter-valuation period (eg if it is known that expenses over the year were higher than expected).
Is it referring to purely A/E adjustment? How is this applied to the surplus before we allow for capital injections in the next step of surplus analysis?
Thank you!