Hi, I have a few questions on this exam quesiton. The examiners report mentions a reinsurance fee no longer being paid on acquisition of the specialist insurer? I'm very confused as to why reinsurance is being mentioned here. Also it speaks about creating projections from statutory and published accounts and also about accounting for latent and catastrophe claims. Would this actually be possible from published accounts data? I cant imagine what sort of projections you would actually do.
Both of those points look like errors to me - as if they were answering a slightly different question (perhaps one of the parties may have been a reinsurer at some stage of their thinking). Talk of cats and latent claims also don't make much sense given the class of business. There's no reference to UK, so potentially I guess some countries may have more info in their statutory or published accounts - but again, looks like an error to me.
Hi - In this paper I am finding it hard to understand Q4 (iii) --> How has the expected loss cost been derived? Can someone please explain. Thanks The examiner comments is very brief about student not displaying the understanding of ILW's
Binomial distribution for the frequencies, working out 4 or more losses of 250m (to trigger the 1bn). Pays out 10m so severity is 10. Severity times frequency gives answer.
