SA2 April 2013

Omg!

 

And Q 1 AOS.....

How did you guys find it?

 

Disaster!

 

Come-on guys, what did you thing? we used to be a very active group, probably the most chatty of this forum prior to exam, where is everyone? It seems I'm the only one baby-crying!....do I interprete silence to mean all was good?

I'm gon'ne have to roll call.....you respond "present" & give your verdict:

Misterh
SABeauty
Flamy
Calibre2001
Eroche1
Edhough5
MissBeta
Iori_
Benny
etc
.....next batch on the register will be released if no one breaks the silence soon!

.....its all fun guys!

 

I found the paper to be quite well-balanced. All in all, there were questions on:

Pricing
Valuation (Solvency I Pillar 1 liabilities)
Capital management (including Pillar 2 and economic capital) + Modelling
Monitoring experience (AoS)


I think Question 1 Part 1 and 2 on calculation of AoS and the components (all for 24 marks) may have stunned quite a few people. However, there was a past paper question on AoEV which had a similar structure.

I went with it as follows:

Q1 Part 1 - Calculation of surplus arising over the year

This is simply (A1-L1) - (A0 - L0) and all we had to do was to calculate these four figures. No analysis of components (withdrawals, expenses, investment, mortality, new business) were required.

Q2 Part2 - Calculation of individual components of surplus

This was calculating each of withdrawal, expense, investment, mortality and new business surplus over the year as well as calculating the last step of "unexplained".

All in all for question 1, I think I made a reasonable attempt although I probably didn't get 100% of all the calculations correct. However, I can already picture in my mind in the examiner's report or ASET they may say something like "Students who had the overall calculation structure correct for the surplus arising and individual components of surplus tended to have gained the most marks".


I must admit this 24 mark calculation question along with the tax calculation questions (10 marks, question 2 part ii) totaling around 35 marks did indeed take up quite amount of time and I did feel pressured in terms of time remaining compared to when I was practising past paper questions.


For question 1 part ii) where we had to discuss capital in excess of Solvency I Pillar 1, I interpreted the question to be focusing more on the side of discussing Pillar 2 and economic capital requirements along with rating agency capital requirements. I know there are other general uses of capital such as reducing reinsurance, expanding into other product lines or M&A type activities but unfortunately I did not have enough time to get around to discussing these briefly towards the end of the exam due to time pressure.


With regard to the discussion of pricing model in question 2 part i), that question was for 10 marks and we just had to discuss what the impact of retail distribution review would have been on the pricing model and profitability. I think if we showed understanding of how pricing models work then we would have gained a significant number of marks.


Please let me know what you guys thought of the paper. However, I must say that I found the paper quite tough compared to many of the past papers (probably except for the past paper which included questions on AoEV and another that included questions surrounding FSA return forms).

 

I felt sick after the exam...

Even though I thought I have done enough revision, on the day I spend too long doing the AOS, panicked and run out of time at the end...

I am fairly certain I've failed so will need to retake.

Good thing is I am doing P2 soon will still need to keep my SA2 knowledge up to scratch.

 

I'm exactly the same as above, both with the AOS panic and doing P2 ASAP.

Typical Institute though! Q1 i) and ii) where again so ambiguous that you could only pick up on the difference in request if you had done lots of past paper questions and just so happened to stumble across it.

Most people I spoke to afterwards took i) as calculate the AOS, and ii) comment on it. These kind of questions are unfair cause in a work context if someone asked you to "derive" the surplus arising and then "analyse" it; you can always ask a follow up question to clarify what they want. This kind of ridiculousness is just a play on words.

I thought the rest of Q1 was fair. I thought Q2 was also fair but I'm kicking myself for not picking up on the change in corporation tax going forward I to 2014 and 2015. Lots of comments on this I missed out on.

Q3 - really helped to have read up a little, but struggled with time in the final two parts to get enought down.

Shame cause I think the paper probably was passable!

See you in September!

 

I'm almost certain the examiners wanted to find out whether the students knew the difference between surplus at beginning and end of year, surplus arising during the year, and which components contributed to surplus arising over the year.

I think there are at least four "big" components of modelling in actuarial valuation - 1. GPV/NPV reserving including ICA/Pillar2 capital, 2. EV including cost of capital, 3. AoS, 4. AoEV (not taking into account the actual reports and FSA returns). Hence it's not actually a surprise that we got an AoS question.

 

I think the point is more how it was asked could be clear

 

...so the AOS questions were close to a past paper?

Anyway moving on, I agree with Andy and Iori_ that looking at the paper again (not good, is it!) its not as terrible as it was in the exam room. I felt exactly as Benny described - sick!. I think its the approach, surely not good to have started with those AOS questions - It derailed me and all the routines I had planned went under water. Throughout the paper I was chasing time and in the panic got into auto-pilot mode, not thinking straight to plan structured and concise answers but scatter-gunning ideas randomly. Its a pity that all the hours may have to be repeated!

As I don't intend taking P2 I will have to go the dryer way of reading the notes every now and then till results are out.

 

Aos

Im just curious to know in what past paper that a similar AOS question also appeared?

The paper was generally fairer than recent papers in my opinion as there was a decent spread of topics tested. However, I didnt pick up many of the first 28 marks on the AOS question (only wrote about 3 pages in total for that 28 mark part and a lot of that was nonsense!!) so that will set me back a fair bit.

Anyone have any idea what the pass mark may be??

 

AoEV question was a bit harder since impact on VIF had to be calculated as well. The question either appeared in one of the very old papers (think anywhere between 2002-2007 SA2) or in one of ST2 past papers. I can't remember exactly which one...

For ActEd exam marking, the pass mark is around 50 so I think maybe it would be similar. However, I think they vary from exam to exam...

 

I too was a bit confused by the AoS wording and spent too long on it. Had I cut my losses and moved on sooner I suspect I might have had enough time to do enough to pass.

I quite liked the rest of Q1 and Q2. Q3 was rushed for me, but if you worked in pricing I think you would have scored lots here.

 

I hopped straight on a plane and took a few weeks off after the exam .

I wasnt that happy at all with it so I have tried to not think about it since. The AOS question in particular which is really tricky under exam conditions. Anyway best of luck to all with the results!

 

I started on Q2, then Q3, then Q1 (iii) onwards. Finally I attempted the dreaded calculation questions Q1(i)&(ii). For me this is the only way to attempt the paper.

There was no way I was going to spend the first hour on Q1(i),(ii) calculations knowing I was in no way prepared. I knew the question was a variation in of the A2008 AOS question & knew roughly what they wanted. But in terms of doing actual calculation under exam conditions it was a lost cause.

Q2 was relatively straight forward but I knew I made a careless mistake and the thought haunted from the day after the paper.

For Q3, I could only rely on experience and common sense from what pricing work i did. And also with my limited knowledge of RDR of course.

I agree it's not as hairy as S2012 (which I failed miserably).

Overall I felt I did the best I could under 3 hours.

And I passed and now qualify as FIA !

Thank you all for sharing and I must say a pass would not be possible for me if not for Acted Forum. Kudos!

 

Hey Calibra2001, congrats on your qualification.

I am also celebrating FIA! ......

........I perfectly agree the forum is a real knowledge center. I found it particularly useful sharing my own ideas/understanding as well as reading others interpretation / challenge. The give-and-take really firms-up/clarifies things........sometime you may end up even more confused but in the end things are clarified most of the time with Acted Tutors intervention(Thanks!).

Many thanks to all!

 

Congrats to those who passed.

I also passed and I must say the forum helped tremendously, especially in confirming my own understanding of the various topics.

I think Forum + ASET + Mock exam was the recipe for me.