jjj820
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does FCF include DIRECT acquisition cost only then? Thanks again
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does FCF include direct acquisition cost only? and indirect acquisition cost is excluded. Thank you
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Thank you. I know the numbers are correct but the confusion is around the definition of non/onerous. A contract can be considered as "onerous" or "non-onerous" depends on how much liability the company is carrying for that contract? I thought as …
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Say a contract with outflow =100, inflow = 90 , then FCF = 10. a. if LRC ex LC = 8 under PAA , we need put up LC =2, LRC = 10 b. if LRC ex LC = 12 under PAA, LC =0, LRC = 12 so under point a. , the contract is onerous and for the same contra…
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and could you please help me understand this. 1 Why do we need to compare FCF and LRC ex LC to decide if it is onerous, isn't that as long as FCF>0 (net outflow > inflow) , it is onerous ? * is FCF used in the comparison, outflow - infl…
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I know 4165 is not the LRC. I was talking about the profit, the profit in the table shows 4745 instead of 4165. so is the profit 4745 or 4165 ? 4745 is "PAA LRC excl LC" - "FCF". Do we need to consider PAA LRC when we calculate the profit? Thank…
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I totally understand what you mean but based on the formulas LRC=FCF+CSM and CSM=-FCF , the LRC = 0 if the new contracts are a non-onerous.
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for Group A, FCF = outflow - inflow = -4165, it means inflow is larger than outflow by 4165. isn't 4165 the profit ? why do we need to consider 580? Thanks
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Thank you !
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Could you please let me know what the numbers should be ? I am still very confused. Thank you.
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Please let me know if this is correct based on the example above, i.e. an insurer covered by 10% quota share RI. Thank you
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Attached an example, an insurer only covered by a quota share treaty (10% ceded) could you please let me know if my understanding is correct ? If it is correct, the sign of RA is not always the same is PV of outflow. Thank you !
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Could you please help me understand how you get CRR = Low (Appendix D) in your example ? Thank you !
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When we say, FCF > LRC ex LC -> onerous Which FCF is applied ? Thank you. * FCF = (Future cash inflows - Future cash outflows + effect of discounting - RA) * FCF = (-Future cash inflows + Future cash outflows - effect of discounting…
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@Staff-T1 Thank you. What I meant was - if FCF>0 (net cash outflow), then the contract should be onerous. why do we need to take an extra step (FCF>LRC (ex LC)) to decide if it is an onerous contract? ie. if FCF>0 then it is onerous, why do…
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@Staff-T1 Thank you for your rely. Also, if FCF>0 (there is a net cash outflow), it already indicated that the contract is onerous, why is it necessary to compare FCF and LRC (ex. LC), if FCF > LRC (ex. LC) then it is onerous?
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Have a similar question. For GMA, the LRC @ initial recognition = FCF +CSM = 0 For PAA, the LRC @ initial recognition = expected premiums - directly attributable acquisition expenses. It is not 0. does it mean that PAA and GMA approach always…
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Could you please help me understand the formula Profit/Loss = (PAA LRC excl LC) - FCF ? if a contract is non-onerous, isn't the profit = CSM = -FCF ? if it's onerous the loss = LC ? why is there a PAA component? Thank you!
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I am still very confused by how the participation ratio was determined. I understand from the post above that the ratio was determined by the non-ceded EE. but why did points (3) and (4) in page 4 said "Business transferred to a risk sharing pool …
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Thank you !
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Hi Graham, I am bit confused is the participation ratio of RSP determined by the business ceded to the pool or business not ceded to the pool ? From above, I believed the participation ratio was determined by the business ceded to the pool.…
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Hi Graham, In Fall2017 Q17, the company started operating on Jan 1, 2017, that is, no unearned premium from prior years. The gross written premium in 2017 was 1550, GEP was 750, GUEP = 700 as at 31 Dec, 2017. GEP = GWP - Change of UEP = 155…
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Thank you Graham
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Hi Graham, Thank you. If we were asked to calculate RoR in 2019Spring21. ROR = (U/W.Inc - CapGains + InvInc + IncFrmSubs ) / GWP Does InvInc = 7500 or InvInc = (7500-800) ? Thanks !
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Hi Graham, Does "investment income (excluding gains)" above exclude Investment expenses? Thank you.
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Oops, sorry Graham, please ignore my question. I just saw Total Net Commission = I - (J-K) - (L-M) under sample answer 6.
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Thank you Graham !
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Thank you Graham! I think I misunderstood that part.
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Thank you Graham !