So how did everyone find this paper? I found Q1 the hardest given that to answer it properly you would have had to have done a lot of reading around Solvency 2. I would be interested to know how others got on and how this compares to their previous attempts. Cheers
Overall not too bad. It could have been worse. On Q1 I found it difficult to come up with the points, and couldn't really seperate out the Solvency 2 points from the planning points. This was especially true for the last 3 parts of Q1. How many points do they need for a 10-mark q on how to improve treatment of historic reserve changes in the planning process? I targeted 20 seperate points, but was struggling to make 7 or 8 good ones. As well I'm not sure how much of Q1 was specific Solvency 2 knowledge, and how much is just common sense. EG I know that using the same estimate of claim inflation in each years planning process cannot be right, but I don't know the specific Solvency 2-related reason that makes it wrong. Second question on portfolio transfers was straightforward bookwork, I thought. Just go through every option and list the advantages & disadvantages.
Yep I agree completely. I also found it very difficult to generate enough points for the last parts of Q1. For the main part I settled on just saying what was wrong with the planning process they were using and decided if I don't know what Solvency 2 says about it I won't try to be clever. I wondered if having a target return on capital for the whole business was against Solvency 2 because they should have allocated capital to each LOB and then had a target return for each. But I didn't say that in my answer. Q2 must be one of the easiest SA3 questiosn I've seen as long as you know your exit strategies.
Overall I thought this paper at least appeared to be more straightforward than the previous sitting but as always it's difficult to know exactly what the examiners are looking for - this wouldn't be the first time I've been caught out! Q1 was very similar to Q1 from Apr-01 (paper 2), without the Solvency II slant of course. However, I still struggled to generate lots of targeted points for the last three parts of this question. Q2 seemed fairly straightforward apart from part (iii). I didn't find it that easier to explain pros/cons of each exit strategy for the classes of business given in the question. Oh well, just have to wait and see...
