Quiz 7 - Loss Recovery Component
Hi,
The last battlecard in mini quiz 7 mentions onerous and non-onerous contracts being grouped together - how is this possible? Aren't the groups created by splitting apart contracts that are onerous, no significant risk of being onerous, and everything else?
Comments
It means grouped together for purposes of reinsurance, not grouped together for measurement.
An example would be having a portfolio of personal Auto with groups of contracts defined to be Alberta and Ontario.
The reinsurance contract will cover personal auto.
Alberta could be onerous while Ontario could be non-onerous
Thank you!