CP3 - Analysis of information provided

[Trevor]

Hi,

I am wondering if the CP3 exam actually requires us to apply some technical knowledge or inferences based on the information provided to us?
What made me ask this is in the 2017 September CP3 exam, we were specifically told to only provide factual information without giving our subjective views.

I interpret this as to mention only the facts literally provided to us, don't draw any inferences. However in the examiner report, many marks were given for the analysis of the results presented. For example:

1. Saying the profit margin is high due to low expenses / low risk retention rate
   Whilst it is pretty an obvious one, it wasn't explicitly mentioned in the information provided so I don't want to mention it because that may be considered giving my subjective view. Doing so may risk losing mark for going against the instruction given.
   
   
2. Information on first time buyer.
   I don't quite agree with this conclusion "assumed" in the examiner report. Most of YOUTHSURE's customers are young adults, which will not be surprising if they haven't got any insurance before. In addition, they are less financially affluent, so it is not surprising that they will shop around for different products. Therefore I won't conclude this implies brand loyalty.
   In fact, shouldn't a higher percentage of customer without previous cover from other company implies more loyalty? If most of the customers have had cover from someone else, it means they were shopping around. therefore PRESTIGE LIFE's customers should have lesser brand loyalty.

We are always reminded that CP3 is a communication exam, to assess our ability to communicate what is presented to us. With that, I think I am not expected to do any number crunching or analysis at all. Is this true?

I hope someone can clarify my doubt because I am not really sure what the examiners expect from us.

Thanks
Trevor

 

[Helen Evans]

Hello Trevor

Thank you for your post. This is an interesting question. I would say that the CP3 exam requires us to apply very limited technical knowledge and make very limited inferences, but that said occasionally you may need to make draw some more obvious conclusions from the factual information provided.

So for example in relation to the September 2017 paper, the background information makes in clear that YouthSure is run very efficiently in the wording as well as figures hence the point about low expenses. And the information spells out the idea of Prestige having a deep relationship with clients whereas Youthsure has not invested in customer service hence the comments on customer loyalty are pretty reasonable conclusions.

In relation to number crunching, it is possible that you might need to do some minor manipulation of figures, so as to present them in the best way for your audience. But I would expect any calculations to be very simple, if required at all.

I hope this helps and your studies are going well.

Helen

 

[Trevor]

Hi Helen,

Thank you for your advice and sorry for the delayed response.
I want to ask more about the reflective questions too. For sections of the examiner report that doesn't say other example is accepted (eg: 2a & 2d), does that mean only the points listed in the report is accepted?

I think the points listed in question 2a of this paper is very generic, some of it I can reproduce for any question at all, eg:

• Visual aids are needed to add variety
• Premium breakdown is best shown in a suitable chart because this clearly shows the proportions
• Visual aids must add value and not just replicate the data
• Tables are kept brief if used at all

Instead, I was very specific in explaining my decision. In my case, I used:

1. Table to tabulate different financial ratios and their values (I didn't realize they can be viewed as percentage of premium spent)
2. Line chart to show the movement of sales volume over time
3. Pie chart to show the relative proportion of each age band for each insurer

So my answer went as:

1. A table was used to summarize and present the financial ratios of each companies. It is easy to compare the numbers across the columns
2. A line chart is used to show the number of policies sold over time. This shows how did the numbers (y-axis) changed overtime (x-axis)
3. A pie chart is used to show the age band of customers in each insurer. This is helpful to illustrate their sizes relative to other age bands, in percentage form.

Also a follow up question on this, is there actually an "error carry forward" marking system?
I interpreted, and analysed the information provided from a different perspective. I might lose mark in the letter content, which is a major risk I am facing.

Given my different perspective, if my explanation to it is consistent to what I mentioned and actually makes sense. Do I still score for communicating the idea across? After all, this is not a technical analysis exam, it is just testing our written communication skills.

 

[Helen Evans]

Hi Trevor

Thanks for your post and again you raise some interesting issues. Re the reflective questions I would usually expect there to be some scope for covering the key themes in the exam report in a different way and still getting credit. I like your approach to the question 2a and the specific examples you give do nicely reflect the themes in the exam report and so I would expect to score.

Re the idea of errors in the main communication and the impact on scoring on the reflective questions I'd have to say it depends! If the error is a minor deviation away from the right answer and still gives you something sensible to talk about in the reflective questions then I think there is a good chance of still gaining credit. If on the other hand the error means your main communication is very different from the examiners and you therefore don't end up really covering their themes in the reflective questions or the answer you have is perhaps much simpler because of the earlier error then unlikely to score.

I hope this helps

Helen