J
Jun Wu
Member
Dear All
Hope you are well
I could be wrong, but after doing some past papers, I have noticed for these two types of questions, the solution includes a lot of marks for 'what to consider', which I don't see this being implied by the original question, so I want to confirm with you if in the exam I should always mention them to score high marks, please.
For example
2018 April, Question 9 iv)
The student actuary has been asked to carry out the reserve analysis for the nonproportional Property Treaty and Casualty Treaty business written.
(iv) Discuss the reserving methods and approach that she should consider (8 marks)
The solution has stated the type of methods, eg Chain Ladder, IELR method etc, but also give marks to the consideration when using these methods, eg tail factor, paid is more accurate than incurred data etc.
This makes sense because it is a discuss question so we want to show what to consider when using various reserving methods.
But , 2018 September, Q5 v)
Describe how the actuary should allow for the changes in claim processing approach when estimating the 31 December 2018 outstanding claim reserve.
(8 marks)
In this question, solution stated to adjust Chain Ladder method (this is the only method suggested!), which is fair as the past data no longer represent future.
But majority of marks (>90%) then is on 'where to find information for me to adjust the chain ladder' & ' what to consider when making adjustment'! eg ask claims staff, adjust differently based on claim types etc.
My query is:
Many thanks!
Best regards
Jun
Hope you are well
I could be wrong, but after doing some past papers, I have noticed for these two types of questions, the solution includes a lot of marks for 'what to consider', which I don't see this being implied by the original question, so I want to confirm with you if in the exam I should always mention them to score high marks, please.
For example
2018 April, Question 9 iv)
The student actuary has been asked to carry out the reserve analysis for the nonproportional Property Treaty and Casualty Treaty business written.
(iv) Discuss the reserving methods and approach that she should consider (8 marks)
The solution has stated the type of methods, eg Chain Ladder, IELR method etc, but also give marks to the consideration when using these methods, eg tail factor, paid is more accurate than incurred data etc.
This makes sense because it is a discuss question so we want to show what to consider when using various reserving methods.
But , 2018 September, Q5 v)
Describe how the actuary should allow for the changes in claim processing approach when estimating the 31 December 2018 outstanding claim reserve.
(8 marks)
In this question, solution stated to adjust Chain Ladder method (this is the only method suggested!), which is fair as the past data no longer represent future.
But majority of marks (>90%) then is on 'where to find information for me to adjust the chain ladder' & ' what to consider when making adjustment'! eg ask claims staff, adjust differently based on claim types etc.
My query is:
- So when I am doing this question the first time, my first thought would be to suggest various methods to allow for the change, eg, 1 ignore the past data, 2 benchmark. 3 reduce my BE by a % etc, but I won't have written much on where to get data, and what to consider.
- Or, should I take the phrase 'allow for xyz' to imply that I should always talk about data and other considerations, in addition to the method suggested?
- and I should always write out what to consider when suggesting a reserving method to back up my suggestion.
Many thanks!
Best regards
Jun