Staff-T1
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It is fine to just use the trilogy - No need to know about the individual cases
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I think I would just replace UW income with ISR. Agreed that it is not clear though and no one really knows how the CAS will choose to test this. @graham thoughts?
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I would guess probably the way that it is detailed in the CCIR instructions
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Risk factors here refer to your projections related to ELR, GWP growth, inflation. For example, projecting that inflation will be 5% in 2024, 5% in 2025 and 3% in 2026 and looking at what impact that has on your balance sheet and MCT ratios
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It's in the OSFI paper under Earthquake risk
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You missed the second bullet point. Check step 3b in the example
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Premiums payable are for reinsurance contracts already in-force whereas expected future premiums are for contracts that are going to be in-force, but not yet active. The source doesn't expound on Formula A too much so I can't help you there unfortun…
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There is an error with the table -> Inflows should not have a negative sign. If your sign is not the same, it would be (750 - (-50)) for the outflows part
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The risk transfer analysis focuses on scenarios that would cause losses for the reinsurer. Given that information, when we take a look at tail scenarios, this profit commission will never be "active". The profit commission inflates the premium becau…
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For the first contract the source describes it as follows: "Secondly, there is a profit commission provision whereby the ceding company will receive a profit commission if the underlying loss ratio is 66% or less with maximum profit provision of 5.0…
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I think this is a great reasoning - I have never thought of it by thinking through the prisoner's dilemma. This makes a lot of sense to me
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Yes, they mean the same thing. Isn't the cost to not cede the risk the same as the risk that is ceded?
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Is there supposed to be more context behind this? I am not sure what you are referring to
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FCF should be equal to outflow - inflow. A negative amount of FCF means the contract is profitable. The profit/loss is just the difference between the PAA LRC and the actual liability from the contract which is pretty intuitive
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Yeah everything you mentioned is correct, except that PFADs for reinsurance is now implicit in the FCF and not the RA
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I would lean towards option B that Graham provided. No, they would not accept it. They specifically mentioned in the common errors section that this is incorrect
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No, I think you summarized it succinctly. For point one, it is not mandatory for PACICC to obtain a loan. The loan is mostly only if PACICC is unable to adequately gauge the exposure to insolvency. I think it is referring to the maximum annual levy …
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1) No, they are not the same. Graham is not referring to the formula in the CIA.Runoff paper which is closer to an Actual vs Expected calculation and is describing what actuaries refer to as running off an accident year. 2) I think only people on t…
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Yeah I meant (60+40.8 - 20)*0.5
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Earthquake models calculate the PML. It is one of the things that you would look at, in addition to AEP (Aggregate Exceedance Probability) and OEP (Occurrence Exceedance Probability) curves and AAL (Average Annual Loss)
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It seems like the interpretation of "% of remaining service provided" is not the same in the Excel and Ed note. And yes, as I mentioned above LRC should be 0 once service has been fully provided, unless there is a special case when a financing compo…
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These are just sample answers -> meaning they are from different candidates so no redundancy here, just two different candidates saying the same thing in a different way
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Bundled just means that it is available together with your coverage rather than a standalone coverage. When you are bundled, you can either be opt in (Where you are not enrolled by default meaning you have to actively state that you wish to particip…
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(60+40.8-20)*0.02. LRC balance should always be 0 when the service has been fully provided
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Yeap it is publicly administered because the government is offering subsidy on the premiums through reinsurance. So indirectly, the government determines the rates. CCR is the reinsurer that administers the nat cat program
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well you lock the rates to calculate your unwind -> But rates can and will change through the life of the policy. The diff between the locked in rates and current rates goes into AOCI or P&L. If you don't lock in a rate, your unwind of discou…
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I am getting exactly 0 when I calculate it by hand? Are you carrying the decimals correctly? Your second row should be: 2040, 40.8, (40.4) , (1000), (1040.4), 1040.4 and your third row should be: 1040.4, 20.808, (61.208), (1000), (1061.208), 0
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yeah the government doesn't pay the premium
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Yes, your interpretation is right. UW risk is the risk inherent in writing new policies. For LRC, there is that risk since you have not written those policies or provided coverage yet. For LIC, the policies are already written and coverage already p…
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All 3 methods are using the same opening discount curve and since it is locked in, you are not changing the yield curve. The 3 methods represents different theories for the future discount rate based on the current yield curve. So from year to year,…