Aggregate asset share

[Benjamin]

Hi,

Ref: CMP, Ch20, p.17

The core reading says that the term aggregate asset share can be used to refer to AS "...for specified product lines or for the whole with-profits portfolio."

It then says "This term may also be used to describe the sum of the individual assets shares."

Are these two things not synonymous? When would the sum of the individual asset shares not equal the asset shares of the portfolio?

 

[Mark Willder]

Hi,

Ref: CMP, Ch20, p.17

The core reading says that the term aggregate asset share can be used to refer to AS "...for specified product lines or for the whole with-profits portfolio."

It then says "This term may also be used to describe the sum of the individual assets shares."

Are these two things not synonymous? When would the sum of the individual asset shares not equal the asset shares of the portfolio?

There will be very little difference between the asset share of a cohort and the sum of the individual asset shares. However, we might have some small differences. For example, in a recent thread we discussed using smoothed mortality rates to calculate assets shares - we might used smoothed rates for individual asset shares, but use the actual rates for the cohort asset shares.

Best wishes

Mark

 

[Viki2010]

There will be very little difference between the asset share of a cohort and the sum of the individual asset shares. However, we might have some small differences. For example, in a recent thread we discussed using smoothed mortality rates to calculate assets shares - we might used smoothed rates for individual asset shares, but use the actual rates for the cohort asset shares.

Best wishes

Mark

Mark, is it correct to assume that each company would be required to calculate two sets of asset shares, one would be smoothed and one would be unsmoothed? The unsmoothed is always required to check the COBS 20 requirement for percentage of payouts around the 100% of unsmoothed asset share, whereas the smoothed asset share would be the one used for determining policyholder payouts and all the good stuff as per the application/ use of the asset share in the core reading?

 

[Mark Willder]

Mark, is it correct to assume that each company would be required to calculate two sets of asset shares, one would be smoothed and one would be unsmoothed? The unsmoothed is always required to check the COBS 20 requirement for percentage of payouts around the 100% of unsmoothed asset share, whereas the smoothed asset share would be the one used for determining policyholder payouts and all the good stuff as per the application/ use of the asset share in the core reading?

I wouldn't go as far to say that it is a requirement. But yes, certainly many companies will find it useful to calculate both a smoothed and unsmoothed asset share.

Best wishes

Mark

 

[Viki2010]

I wouldn't go as far to say that it is a requirement. But yes, certainly many companies will find it useful to calculate both a smoothed and unsmoothed asset share.

Best wishes

Mark

Thank you - very helpful.