Q&A Bank 6.2

Hi

How do we calculate the commissions for the 2010 and 2011? I could only get the 2009 one as it's simply 17.5% of earned premium.

Thanks.

 

I got it.

Need to calculate it using the long way; expenses and commissions incurred less increase in DAC.

I wonder why we can't just apply the 17.5% on earned premium ...

 

In section ii b, how do you determine how much of the claims reserves brought forward is released? the 2009 second year surplus of 4.09 seems to be split equally between 2010 and 2011, but how come the 3rd year surplus 2.03 is not split between 2011 and 2012?

The 2010 second year surplus 12.27 is not split equally between 2011 and 2012; why?

Why is the 2009 and 2010 loss recognised immediately but not the 2011?

 

Does this explain it?

http://www.acted.co.uk/forums/showthread.php?t=4849

 

Thanks Pede, but not really. Can't follow some of the numbers (commission 10.13 less what is 8.1?)

I got the 4.05 surplus, but how is that split between 2.03 and 2.02?

I also got the 12.27 surplus, but how is this split between 8.18 and 4.09?

 

It takes into account the surplus/loss from the previous year.
For example, the loss of 2.03 in the first year is taken off the profit of 4.05 so that 2.02 is left over.