Level of detailed explanation required

[Sankar Krishna]

What level of detailed explanation is required in the CP3 exam?

April 2019 exam
An error in the valuation report had to be explained. The Jargon list provided in the examiner's report included terms such as coding, mapping, algorithm, etc. But a detailed explanation regarding the marital status data, assumptions where data is not available (proportion of married where data is available is assumed to hold where data is not available), the proportion of married change from 67% to 80%, the collection of marital status details, etc., were given to the Trustees. The error could have been simply explained as a wrong assumption in calculation that understated married members and overstated single members.
How will these specific details that explain the valuation aid the Trustees in understanding the error? Was so much detail necessary and will the Trustees understand it given that even simple terms like algorithm and mapping are considered jargons

Sep 2021 exam
Impact of underwriting loadings on pricing had to be explained. The audience was medical underwriting team. In this paper, even though the audience had a technical background, the explanation of impact of experience analysis on pricing was not detailed. The procedure was not explained. It was simply stated if actual experience is better than expected then prices are reduced. More detailed explanation regarding the pricing multiple and cross subsidizing using the loaded lives adjustment factors could have helped them understand better?

My doubt:
Trustees in April 2019 exam were given a more detailed explanation whereas a more technically sound audience; the medical underwriters in Sep 2021 exam were given a very brief explanation excluding a lot of details like the method used in pricing.
There is a lot of subjectivity and judgement in this exam. Kindly help me in understanding the extent to which these explanations are required.

Thanks in advance!

 

[Helen Evans]

Hi Sankar

Thank you for your post. I would say that the level of detail we require in our solution should be such that we will have a 'satisfied audience' once they have read our communication. I like that in making your comments above you have put yourself in the shoes of each audience, this is a really good thing to do when assessing your communication.

In relation to these exam papers, it is important to note that there is some flexibility re the level of detail as long as the examiners feel that the answer does meet the audience's needs. So although they have provided a 'model' answer, other solutions which would still satisfy the audience can be a pass.

In relation to the April 2019 paper I would be thinking of a bit more detail that you suggest, as the wording in the email from the manager asking us to write about this does say there is a need to 'be transparent about all of this'. I think the additional detail in the exam report is then a reflection of this idea of full transparency.

Re the Sept 2021 paper, the audience could be satisfied without this additional detail on pricing multiple etc, but that said if you had introduced it in a clear and concise way then I would still expect that the answer would be a pass.

I hope your studies are going well.

Helen