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Discussion in 'SP7' started by vidhya36, Jul 10, 2019.
Can somebody explain the steps for the question on this page please. TIA
Please can you clarify the page number that your question relates to as Chapter 15 only has 119 pages
Hi, the page number inside the chapter is 69.
The steps are set out in the table on page 70:
For each quarter as at the end of the year:
1. Calculate UPR gross of DAC
2. Calculate UPR net of DAC (=75% x (1))
3. Calculate expected claims from unexpired exposures (by applying appropriate loss ratio to (1) - loss ratio is 120% for Q1,Q2 and Q3 and 60% for Q4)
Then AURR required is the sum of (3) minus the sum of (2) over all 4 quarters, subject to a minimum of zero.