Hi, Part (i) asks about the information that a purchaser would ask to assess the profitability of business written over the last 3 years. However the solution is about assessing the future prospects\profitability of the company.
Looks fair to me - lots of mentions of 'past' and '3 years'. Don't forget also that business written in the last three years may not be fully run-off.
doesn't the fact that they mention "past" losts of times suggest that we should concentrate on the past?! I agree that we should consider the reserves, expenses etc but still this is an assessment of the runoff portfolio. My understanding was that we need to assess the value\profit added by those 3 years. It doesn't say anything about a projection or assessment of company value\goodwill....
Sorry, you've lost me - it's the solution that does say, many times, "past 3 years". To me, the solution looks like it answers the question. There aren't many bits in the solution talking about the future (except where run-off of the business written in the past is discussed, which is perfectly valid), are there?
sorry, I got confused. I had another read of the solution and I guess the main point is that the information requested will also allow us to assess the reasons for any change in profitability from year to year and also allow us to understand better the profile of the business written. Any ideas where I can find any info on underwriting manuals and claims handling manuals? Thanks!
Not aware of any - best bet is to get a mate who works in the London Market to talk through what's in there's, perhaps? There have been a few exam questions hinting at what's in underwriting manuals, but I'm sure you've seen them already.
