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Page 662 Ch:15 Calculation of AURR

Discussion in 'SP7' started by vidhya36, Jul 10, 2019.

  1. vidhya36

    vidhya36 Very Active Member

    Can somebody explain the steps for the question on this page please. TIA
     
    vidhya36, Jul 10, 2019
    #1
  2. Darren Michaels

    Darren Michaels ActEd Tutor Staff Member

    Please can you clarify the page number that your question relates to as Chapter 15 only has 119 pages
     
    Darren Michaels, Jul 14, 2019
    #2
  3. vidhya36

    vidhya36 Very Active Member

    Hi, the page number inside the chapter is 69.
     
    vidhya36, Jul 15, 2019
    #3
  4. Darren Michaels

    Darren Michaels ActEd Tutor Staff Member

    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.
     
    Darren Michaels, Jul 15, 2019
    #4

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