A work related question... Which I hope st2 students can help with Have come across Rebasing of gross premium reserves in cash flow projections (Rebasing = letting experience assumptions apply at each valuation date) Is Rebasing not necessary for net premium reserves? Any opinion /ideas will be much appreciated. Thanks.
The impact of re-basing should be much smaller under net premium valuation. Purely taking the fact that NPV is less sensitive to basis changes. My suggestion is try it out and see what happens. It depends how you qualify "not necessary". There will likely be an impact though there's no guarantee it would be considered significant.
