When we say Reserve at end of year, I think it means the reserve at end of policy year(e.g. ch24, P.34). It is different from reserve at start of next policy year because we need to divide the survival probability to get the reserve at start of next policy year. However, in Paper B, like Apr 2022 Q1 and Sept 2023 Q4(iii), when the question ask for the Reserve required at year end, why I see the answer calculating reserve at start of next policy year? Thanks a lot!
Hi, This one can be quite complicated but in general, there's no difference between the reserve at the end of one year and the reserve at the start of the next, as it's the same point in time (as long as you're being consistent with the cashflows you are including). However, in subsequent calculations you need to be careful how you use it as, for example, you might need the year-end reserve per policy in force at the start of the year. So, for example, in A22 Q1, the reserve at the year-end is multiplied by the probability of surviving that year, when used to calculate the PV. Hope that helps.
