Hi, quick question regarding Q6 in sep 2022 , part (iii) asking about if UPR / URR should be revised . I am not quite follow the answer suggested in the " examiners' report" : 1. for no need to revise UPR / URR - " the actual impact from the early WS is at 20% , within the estimate CAT component of URR " my question : - actual losses is 0.2m , shouldnt the incurred losses compared to earned prem ? should be 40% ( 0.2 / 0.5) ; therefore it is similar to what Cat assumed 2. for need to revise UPR / URR - " the early loss was consider to be material at 20% of GWP , and it is higher than cat portion of URR my question : - Cat portion of URR = 40% , how can 20% greater than 40% ? or is that mean cat portion of URR between July and Sep is ( 0.5 - 0.25) * 0.4 = 0.1? i am confused thank you so much for your time
I wouldn't read too much into the figures given. All they are suggesting is that if the claim is within the cat component assumption, then it may be reasonable to leave UPR/URR alone. Whereas if they think the early claim is a sign of worse things to come, then UPR/URR may need revising. This is all explained further in ASET.
