Spring 2015 - Q 25

thesuperactuarythesuperactuary
edited April 2022 in CCIR.ARinstr

Hi, i have a question relating to Investment Income.

Here: We only given AY 2013 and 2014.

My first attempt that is "A" would be 0 - with the assumption that the company started writing business in 2013. Is it still valid to use ?

I believe at one of earlier post in this forum, someone mentioned we need to data point to calculate Investment Income.

Also, is it safe to calculate the investment income for the earliest and the latest year (in this case in 2013 and 2015) all the time with one point of being 0?

The reason i am asking is because in P&C1 report, 60.41: The layout is like this (please see the attached)

We don't have investment income field which one point is 0 as well I think.

Could someone share some thoughts on this?

Comments

  • Staff-T1Staff-T1
    edited April 2022

    We are calculating the investment income for Accident Year 2013 - The unpaid will necessarily be 0 for this AY at the start of 2013 even if they start writing their business in 1950. You don't have to assume that they start writing their business in 2013 because they wouldn't have any unpaid as coverage has just begun for AY 2013 regardless of whether they are a new/old insurer. I think this answers your second question also. In general, for the first 12 months of an AY, the investment income would be yield*(0+ unpaid @ 12 months)/2

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