Eleanor Cawston
Active Member
Hi,
I don't understand the calculation of the reinsurance premium for Treaty 2 in the examiner's report or the revision note booklets.
I understand these elements:
50,000 = 50% sum assured
1.1 = profit loading of 10%
But why is the assurance factor 2 x 0.057 when the question states that the reinsurer's risk premium rates are based on the insurer's original pricing? The original pricing had an assurance factor of 0.11.
A more general question: in the syllabus, the section on Reinsurance mentions describing the purpose / types / structures of reinsurance and factors to consider before taking it out. In particular, there is no mention of calculating anything, so is this no longer relevant to the syllabus? Or are pricing calculations still examinable as this is covered in earlier subjects so assumed knowledge?
Thanks,
Eleanor
I don't understand the calculation of the reinsurance premium for Treaty 2 in the examiner's report or the revision note booklets.
I understand these elements:
50,000 = 50% sum assured
1.1 = profit loading of 10%
But why is the assurance factor 2 x 0.057 when the question states that the reinsurer's risk premium rates are based on the insurer's original pricing? The original pricing had an assurance factor of 0.11.
A more general question: in the syllabus, the section on Reinsurance mentions describing the purpose / types / structures of reinsurance and factors to consider before taking it out. In particular, there is no mention of calculating anything, so is this no longer relevant to the syllabus? Or are pricing calculations still examinable as this is covered in earlier subjects so assumed knowledge?
Thanks,
Eleanor