Hi I have seen a lot of answer scripts talking about new business vs renewals one thing I can recollect new business is costlier to acquire, renewal less costlier But I am not clear about split importance in terms of reserving Capital modelling Pricing: although above point might contribute to premium can anyone please help me understand this better
That's a very open question! Perhaps you can be more specific about which element you don't understand? Splitting data into various homogenous groups is just one part of any exercise - be it reserving, capital modelling or pricing. One common split is by new/renewal simply because the business may behave very differently depending on whether it's new to the company or has been around for a long time. Yes, expenses are the obvious big difference, but also, for example, claims behaviour and risk profiles vary between new and renewal business. Hope that helps!