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Hello, Setting up the captive will enable Coca Cola / FedEx to deal ‘directly’ with a reinsurer. Reinsurers enter into contracts of insurance....
The total return on an investment = income yield plus capital growth. It’s the total return that ultimately matters.
Hello, The higher initial yield on the lease would be needed to reflect the complete loss on your investment (and the right to collect the rental...
The TVOG can be valued using option pricing techniques. CM2 may set out what you’re looking for.
Example: a with profit contract may have a guarantee that exceeds the asset share. The difference between the guarantee and asset share is the ‘in...
The value of an option is equal to the intrinsic value + time value. The cost of guarantees is equal to TVOG if the contract is ‘out of the...
An internal model allows a firm to calculate the SCR using its own model, methodology, assumptions etc. All firms (IM and SF) are bound by the...
The SCR is defined as the change in basic own funds. A number (dare I say, all...) of the Standard Formula demographic [sub]modules includes the...
The approach to calculating the risk margin is prescribed. My (and I suspect your colleagues) comment is in relation to where the current design...
Including the risk margin within the calculation of the SCR introduces circularity. The risk margin is the discounted value of future SCRs...
Yes, it would not be unreasonable to expect some of the credit widening to be due to the market changing (increasing) its expectation around the...
Responses in turn. 1. credit spread = retained risk + illiquidity premium. The retained risk is generally equated to downgrade and default risk....
You’re over thinking and overly worrying. Write it down if you think it makes sense and move on. Don’t obviously write down none sense if you deem...
I haven’t looked at the specific question you mention. Nevertheless, it sounds like you have the right sort of idea. I wouldn’t be disheartened if...
Hi Trevor, It sounds like your preparation is going well ! Don’t be too hard on yourself. At this stage, it’s important to (stay) relaxed. Be...
