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Sep 13 Q 10

G

George88

Member
Im sure i saw in the notes somewhere that it was imprudent to discount at a rate above risk free - since it is the insurer who is taking the investment risk rather than the policyholder.

As such i didnt discount the result and quoted this result in my answer.

Is that stupid? would i get credit for this?

Thanks,

George
 
You do need to allow for investment return in your gross premium calculation. It's less prudent as you say, but otherwise you risk charging too high a premium compared to your competitors.
 
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