In chapter 10, page 6, there is a heading "calculation of base values", which seems to be talking about estimating outstanding claims. But the summary at the top of page 6, categorises this section as "choose a base period over which to collect claims and exposure data". Is this a typo or am i misinterpreting what the section "calculation of base values" is actually trying to say?
Gareth, sorry to dwell off topic, but why are you studying ST3. I summed you up as an investments guy. ST3 is really the last subject (maybe after pensions) I would choose, I just finished CT6 and hated it. Anyway good luck with it. And good luck with CT8 and ST6 results tonight. (PS I am taking on ST6 for September, next year ST5, (close second is ST2). Cheers. (Tip, I find if you really need an answer to the question you stated, send an e-mail to ST3*bpp.com. They're a great help. Responses here are sometimes useful.)
erik, i work in GI, which is a good reason... i think the future of GI will have more investment methods in it, since Cat bonds are getting quite big now. i'm going on a tutorial next week, so i will ask then if no one responds. i'd hate to use up my email question quota this early in the exam session! Oh and good luck with your results tonight
Hi Gareth Chapter 10 deals with premium rating. The claims from the base period are projected into the future over which the premiums will be relevant. Included in these claims will be a provision for outstanding claims (remember you need the ultimate total claims from the base period). So, in short, to calculate future premiums, you will require an estimate for current outstanding claims. This might be the reason they touch on it in Chapter 10. I won't worry too much about reserving for outstanding claims at the moment. These are covered more thoroughly in Chapters 14 and 15. Rather concentrate on the principles and method behind premium rating. I hope this helps! Regarding the other point made, it is interesting that Alternative Risk Transfer methods are not included in ST3 but it is included in CA1. These are also covered quite extensively in SA3. Good luck with the studies.
that makes much more sense - thank you very much. it doesn't surprise me much that ST3 omits ART, the course is already too long due to the 106 bits thrown in...
