actuaryp24
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Since we are assuming mid-year payments, 3500 is paid out on July 01 2016. Should 3500 also be discounted back to Dec 31 2015? So would the amount paid in CY 2016 from AY 2014 and AY 2015, discounted back to Dec 31 2015 be [3500/(1.02^0.5) + 0.55 …
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I am very confused. Why would that need to be taken into consideration?
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Is [3500 + 0.55 x 20000/(1.02^0.5) ] the unpaid amount for AY 2014, discounted back to 2014? Is [0.444 x 20000/(1.02^1.5)] the unpaid amount for AY 2015, discounted back to 2015?
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I'm still confused with this question. If the DPAE decreases, then there is more premium acquisition recognized in the current period. (This is due to a decrease in the expenses). So far so good. However, if more premium acquisition is recognized…
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For the duration of claim liability, I am getting 0.9213 vs 0.8565. This is how I did it - Mac Duration - (0.5 x (0.555/1.02^0.5)) + (1.5 x (0.444/1.02^1.5)) / 0.9815 = 0.9395 Mod Duration = 0.9395 / 1.02 = 0.9211. Is this method correct ?
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Would the calculated net APV be equal to the actuary's estimate in this question?
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Can you please elaborate as to why the Net Losses are reduced by this amount? Net losses = 525,000 – min(450,000, 200,000 – 450,000(.2))
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Is there another way to calculate the duration of the premium liabilities in this question? I'm not sure I understand the age in the solution given.
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Makes sense, thank you for the quick reply!
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I'm wondering why we calculate the PV of AY 2014 as 3500/(1.02^0.5). Why don't we consider the time period 1.5 as well like how we did for AY 2015?