SA3 September 2005 exam

Discussion in 'SA3' started by Ian Senator, Sep 23, 2005.

  1. Ian Senator

    Ian Senator ActEd Tutor Staff Member

    What did you think of this exam?

    Did the triangulation of numbers surprise you in Question 1?

    I have heard that some people found it very difficult to attempt all parts of both questions in the time allowed :( . What was your approach to timekeeping or did you not have a problem?
     
  2. Alex

    Alex Member

    I thought Question 2 was the surprising one. An 'average year on year change in expected profitability' index is quite odd to build. Expected profitability comes from the budget plans.

    Presumably this index was to show the effect of changing business volumes or the underwriting cycle. If you wanted to show the underwriting cycle you needed to strip out the exposure and vice versa. The other odd thing was that this 'index' wouldn't take any account of actual experience.

    Time keeping was a problem, as usual with these 60/40 mark questions. You tend to spend too much time on the 60 marker and by the time you get to the 40 marker you are in a rush and it's a lot harder to pause and think clearly, especially when the 40 marker is not straightforward and this one was a challenge.
     
  3. Julia

    Julia Member

    I agree - I had a huge problem with time. Particularly as the 40 mark question was so obscure and required quite a lot of thinking time.

    Question 1 wasn't so friendly either :(
     
  4. shyguy

    shyguy Member

    I wish I worked for ...

    ...With the examiners being actuaries and having a workload, there will always be advantages (or disadvantages as you may know it too well and forget first principles) to working in the relevant areas and companies....

    For Question 2 if you used such an index in your work, it might have been a doddle. However what was 2 (iv), the theoretical risk premium for reinstatement premium protection all about? How should that one have been answered? It looked very easy but did anyone actually get an answer for it? I did not. :(

    On the whole the SA3 examination should have been easy (if you knew the ST3 material thoroughly and had done all the marking assignments plus that past paper question on accumulations). As I did neither I struggled.

    Time trouble was not the issue; I just could not recall it (on top of bad exam technique) or understand it.

    Q1 - looked easy but what is a large individual claim?
    Explain always means hideous...
    Discuss means trouble for this student

    It looks as if I will be doing it again...I think it might be time to give up work for five months or so, take out a marking course, improve my fading memory and brush up on my examination technique. I have been taking this examination (and its predecessors) far too often.

    By the way the exam could have been even more difficult for some: try tackling it if English is your second, third or fourth language!
     
  5. Chris

    Chris Member

    so what methods did people use for the calculation of a large loss IBNR?

    I feel the introduction of RIPs at the end was very unfair as those familiar with reinsurance treaties should have found it a doddle, while others will have been struggling to think straight by the time they came to that final question....
     
  6. Alex

    Alex Member

    I think one way to reserve for large loss IBNR would be to spread the cost of these large claims over the past 6 years. It's difficult because technically, you might not be allowed to set up equalisation or catastrophe reserves... except for the infamous 7 'volatile' classes...

    I agree the 2nd question was a bit unfair. It could even have been split into 2 questions as the latter parts on RIP had little in common with the ealier part on index. By the time you got there, it was really hard to think straight as you are switching from a different field into another. Even the obvious points are hard to generate then...
     

Share This Page