Subj 403 paper 2 2002 September Q1ii

Hello,
I am struggling to see how the free assets in 2003 has come to 396.
In my calculation I have assets = bonds (1b) + DAC(0.66) / liabs = upr(220) + OSclaims (550) which means I am 100 out as difference between these 2 equates to 296 - can anyone see what I am missing?
Cheers

 

Hi

Dividends are paid so as to maintain the solvency margin at 90% (360/400) so if you write 440 in premiums your free assets should be 396.

I am not sure you are doing it correct the way you want to do it because I can't see how you are including the value of assets after 1 year, retained profits etc. I also think the free assets are an input in the calcs based on the information to get the dividend payment hence the retained profit.

 

Hi, I am also stuck on this question.

I have that the free assets are 360 for 2002, 396 for 2003, 435.6 for 2004 etc....
This means that the solvency ratio is 0.9 across all years.

From here, I am unsure how to calculate the dividend payment, as I used the fact that the solvency margin is consistent across years to calculate the free assets....

Thanks