Sept 2015 Paper 1 Q5(iii)&Q6(iii)

[rlsrachaellouisesmith]

Hi

I wonder what in this question indicates we should be discussing potential levers on surplus rather than capital management techniques?

Is it just that the rest of the question is on surplus?


And on the second question, can you help with definition of data requirements: in this question it focuses on data required for cashflows, whereas I considered things impacting volume and quality of data, for example

disclosure requirements under regulation

format of data

data controls

granularity of data for risk management

number of years of data used

automation of data collection

cost of data collection and management of this

importance of being able to compare from year to year


Are data requirements always referring to cashflow requirements? Or is it just in this question we have been led down the path of cashflow requirements because the question is based on premium setting?


Thank you

 

[Helen Evans]

Hello

Thank you for your post.

In Qn 5(iii), I agree that it is the overall direction of the question, ie the earlier parts of the question relate to sources of surplus together with the wording 'actions ... to reduce the deterioration' which is not as strong as saying capital management tools to perhaps inject more funds.

In 6(iii), again I'd say it is primarily the earlier parts of the question which are pushing us down this route, ie that you have been asked to describe the data for pricing in (ii). Also note the specifics in the question, ie whole life vs funeral cost plans, where we are given specifics I want to make sure that is a real focus in my answer of using this to produce my points rather than covering higher level ideas.

I hope this helps and your studies are going well.

 

[rlsrachaellouisesmith]

Thank you Helen