Mind reading for CP1 / Apr2013 P1 Q6 i)

Discussion in 'CP1' started by Logarithm n Blues, Mar 15, 2020.

  1. Logarithm n Blues

    Logarithm n Blues Active Member

    I'd like to ask about the specific question in the title but also about a more general problem I'm facing.

    The question is something like:
    "[Gives quite a specific extendable term assurance product that is being introduced to market. Lots of detail]
    Describe the sources of data that could be used to price the contract [4]"

    Part of my process in answering questions like this is to highlight the command verb and also highlight the subject noun for that command verb. In this case I have highlighted "Describe Sources"! I find this helps to keep me focussed on what I'm actually being asked to do.
    In this case I felt that I had to figure out what were the sources of information that could be used to price the contracts and then for each one generate a few bullet points each to describe them ie. show the examiner that I understand what each one is and what it might be used for.
    This seemed like an exercise in picking the most relevant 4 items from TRAINERS and then showing understanding of them. I figured that most of the detail given in the question must be for other question parts, but I also tried to link it up by giving one or two examples that were relevant (eg. Option take up rate)

    On looking at the answer (as given in the revision book) it looks to me like the sources themselves are only mentioned in passing and a lot of credit seems to be being given for talking about the different assumptions required and their materiality. Some points talk about characteristics of the data.
    eg - "Granular data will be required to understand the relationship between mortality and persistency..
    ..This will depend on age, original term/ premium, premiums after the term period and duration after the level term period."

    I can recognise these as absolutely valid points but if I thought about them while I was generating ideas I would not write about them on the exam script as they don't seem to answer the question - "Describe the sources.." These points seem to me to answer another question something like "Describe the assumptions and the data requirements for pricing the product".
    I can try to give myself the feedback that I need to give a broader answer that covers more points, but at the moment I'm finding it tough to know what other stuff to include other than what they directly ask for.

    How do I get better at recognising this? Does anyone feel like they have overcome this kind of thing? Is it just a case of doing past papers until you feel like you can read the mind of the examiner?
    I'm sure there is no easy answer I'm just trying to understand how I can apply my efforts better.

    Sincere thanks
     
  2. Lindsay Smitherman

    Lindsay Smitherman ActEd Tutor Staff Member

    Hi

    The main points in the solution to this question cover in turn the following sources: internal data - same/similar products, external data - other insurers / reinsurers / overseas. For each, there is a little extra detail indicating which of the pricing data requirements the source would be most applicable for, and where relevant something about adjustments that would need to be made. It isn't clear how this differs from what you did?

    Don't worry about those final couple of points in the solution. There will invariably be a few points in the examiners' report where you will think 'I never would have said that' - ignore them! There are plenty of other points that could have been made to score well - and you're unlikely to have needed those ideas even to gain full marks.

    Here it was (as tends to be the case) important to aim to cover a wide range of data sources and then demonstrate understanding of the relevance of each to the specific situation (ie pricing this particular type of product).

    Underlining key words can be a useful technique, as long as it doesn't mean that you end up over-simplifying the question - make sure that you still read carefully and use the accompanying detail.
     
  3. Logarithm n Blues

    Logarithm n Blues Active Member

    Thanks Lindsay. Really appreciate that perspective
     

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