In Q&A 3.7 (i) solution, third paragrah " For each product..." Can I confirm that, this paragrah is talking about modelling the profitability of a new policy from issue day 1? If yes, this is confusing. My understanding is that this is only used when we estimate its profitability at the pricing stage (Single Policy profit test model - specified in notes Chap14 under section 1.3) . Since the question is asking the profitailibity of exisitng/in-force policies (rathern than new business), why the Single-Policy profit-test model is used here? isn't that we should project the cashflows from now on in respect of MPs (of in-force business -whose issue day is in the past). It's very much appreciated your help
The question is asking about the existing product "range", not existing products. So we're looking at developing and pricing new products to change what we offer to new policyholders. Hope this helps.
