• We are pleased to announce that the winner of our Feedback Prize Draw for the Winter 2024-25 session and winning £150 of gift vouchers is Zhao Liang Tay. Congratulations to Zhao Liang. If you fancy winning £150 worth of gift vouchers (from a major UK store) for the Summer 2025 exam sitting for just a few minutes of your time throughout the session, please see our website at https://www.acted.co.uk/further-info.html?pat=feedback#feedback-prize for more information on how you can make sure your name is included in the draw at the end of the session.
  • Please be advised that the SP1, SP5 and SP7 X1 deadline is the 14th July and not the 17th June as first stated. Please accept out apologies for any confusion caused.

Assignment X5 Question 10

D

dChetty

Member
Is catastrophe cover also used for Individual Life business?

In part (ii) the solution says "Since the direct writer will be keeping some of the risk, it will still want to reduce its expected claims experience and volatility as much it is cost effective to do so. If the treaty contains a profit sharing clause, this becomes even more important".

My questions based on the part (ii) statement.
Would the underwriting process decline cover or claims at claims stage to reduce claims experience? How would the volatility be reduced? Why would it be more important with a profit sharing clause? How would profit sharing work, share of total profits or just mortality profits?

Please advise.
 
Back
Top