Actuary@22
Very Active Member
Hi
In Section 3,Timing of surplus distribution,didnt understand the following-
Maximisation of shareholder transfers implies deferring the
emergence of surplus as little as possible, as the rate of return required by shareholders
will usually exceed the rate at which undistributed surplus accumulates within a life
insurance company.
As per my understanding,if surplus is deferred means more TB so fund maybe able to earn a higher investment return(due to a riskier investment strategy) and shareholders may get a higher transfer as a result.
Didn't quite understand the para above and why would they want to defer the emergence as a little as possible.
In Section 3,Timing of surplus distribution,didnt understand the following-
Maximisation of shareholder transfers implies deferring the
emergence of surplus as little as possible, as the rate of return required by shareholders
will usually exceed the rate at which undistributed surplus accumulates within a life
insurance company.
As per my understanding,if surplus is deferred means more TB so fund maybe able to earn a higher investment return(due to a riskier investment strategy) and shareholders may get a higher transfer as a result.
Didn't quite understand the para above and why would they want to defer the emergence as a little as possible.