Hello On the second point, the notes mention that for lines of business with more complex structures, these risks are pooled and charged a similar premium but there is no mention of how the premium is calculated. How is the premium determined? Guesstimate? Thanks.
I think you are still looking at the 2010 ST8 notes. You are referring to Section 9.5 of Chapter 10 in the 2011 notes. A good example is creditor insurance. The premium rate charged to a customer buying insurance with their loan from a particular lender will often not depend on that individual’s risk profile at all (ie their age, gender, occupation, etc). However, the premium rate charged will depend on the lender. The insurer will consider how good a risk that lender is, perhaps taking account of their mix of business by age, gender, etc and the past claims experience of their creditor scheme. Hope this help Duncan
Thanks Duncan I just realised there have been so much updates from the 2010 version. Guess I am better off ordering the new set.
