K
KDarwin
Member
I think it is best to say here that in my method for this I separate out the reserves at the start and end of year for my calculation, rather than calculating an 'increase in reserves' in total as in the notes. We did this on tutorial and it made it a little easier for me to understand on the day (though maybe due to current confusion, that wasn't really the case).
In the Q&A bank for section 3, question 16, we are given the 'reserves at end of year per policy'.
When I initially attempted this question, I took these to be reserves at the end of the year in my profit testing table.
However, the solutions appear to use the reserve at end of year 1 from the question as my profit test table equivalent of the reserves at the start of year 2, and then calculate the reserve at the end of year one as p multiplied by this. etc.
I'm really confused as to why this is the case.
Are these reserves in the question the equivalent of x_V's?
If so, am I interpreting them incorrectly in using them as reserves at the end of year x?
Or is this to do with profit tests being calculated per policy in force at the start of the year?
I hope this makes some sort of sense - but it has been really difficult to type out coherently - feel free to ask for more info if needed!
In the Q&A bank for section 3, question 16, we are given the 'reserves at end of year per policy'.
When I initially attempted this question, I took these to be reserves at the end of the year in my profit testing table.
However, the solutions appear to use the reserve at end of year 1 from the question as my profit test table equivalent of the reserves at the start of year 2, and then calculate the reserve at the end of year one as p multiplied by this. etc.
I'm really confused as to why this is the case.
Are these reserves in the question the equivalent of x_V's?
If so, am I interpreting them incorrectly in using them as reserves at the end of year x?
Or is this to do with profit tests being calculated per policy in force at the start of the year?
I hope this makes some sort of sense - but it has been really difficult to type out coherently - feel free to ask for more info if needed!