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Exam technique - September 2017 1 (ii)

C

cw812

Keen member
Hi,

I understand that exam solution contains more points than required to score full marks. In this question, the solution suggests both 'increase premium...' and 'reduce premium...' which seem contradictory. Would they be counted as two distinct ideas or should i just pick one in exam?

Regards,
cw812
 
Hi cw812

In this question it would have been fine. The actions in part (ii) depend on the cause of the loss, so as the solution says, if it was due to low new business volumes, reducing premiums would help. Alternatively, if the loss was caused by poor claims experience, increasing premiums to cover the expected claims would help. The solution isn't saying both will be appropriate, but they are suggested actions. I actually think it was important not to just assume one option in this particular question as it would potentially have closed ideas to you and made part (ii) more difficult.

So, it very much depends on the question.

Best wishes
Sarah
 
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