(2018.Fall #19)

MicheleDonaMicheleDona
in General

Hi this question is about Earthquake reserve calculation.

the question states that the PML are as of 2017 yet in the examiners report they still extrapolate between 2014 and 2022 as if 2022 we were to use PML500 and 2014 we were to use PML 420.

is there somewhere in the notes that explains any of these calculation?

also 2014 countrywide is just the max of east/west while 2022 would be the (east^1.5+west^1.5)^(1/1.5)
will this always be the case?

thanks

Comments

  • Staff-T1Staff-T1

    Hi, in short it is basically because there is a phase in period to transition from PML 420 to PML 500. That being said, the phase in period is over so this question is no longer relevant. An explanation is provided in the old MCT paper but again, no longer relevant.
    Country-wide PML will always be (east^1.5+west^1.5)^(1/1.5). Again, extrapolation is no longer needed because we are now in 2022

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