Staff-T1
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I wouldn't worry about the parallelogram. They should give you the factors. It would be insane to calculate it. Same for the premium revenue pattern. Most of the time you would just assume all premium is received at time 0, or at time 0.25,0.5,0.75,…
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@adipelino yup you are right. I made a mistake there whoops. I will correct it. And yes I meant Present value of future cash flows. Fulfilment cash flows include the RA which I did not want to include in the question.
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The source provides a table with a numerical example on page 28 which shows exactly what you are asking for
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I guess it is just not in the list of battlecards? @graham can you confirm this is intentional?
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For 1) That is correct. An example will be a large claim payout in the current period, but no changes in actuarial assumptions which means your CSM remains the same. For 2) you are also right. The difference is that loss RC component is not part of…
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It is the difference in the risk position as pointed out in the middle of the sentence not the difference in dollar position. Basically at a high-level you can think of the RA as the difference in the capital position of the insurer with and without…
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From page 60.35. It is mentioned in part (d)
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@graham any thoughts on this?
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When you are insolvent, the creditors of the company still have claims to the underlying assets and are able to get back some funds through liquidation. However, given that the company is now insolvent the actual amount that we can claim back from w…
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I agree that FCF = Cash outflow - inflow makes more sense. Unfortunately, for this paper the CAS defines it as inflow - outflow
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You would have a separate section for your LC I believe. I don't think the material describes it exactly. But yes when contract is bound the LC is recognized immediately
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Yup although I believe you do not amortize your DAC under GMA
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Sounds good
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If it is onerous, you need to book the loss immediately in P&L by calculating the Loss Component by comparing FCF and LRC (excl. LC)
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Being an actuary in Canada has nothing to do with your province. An no, only FCIAs are considered actuaries in Canada. If you do not have an FCIA, you are not an actuary in Canada
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Basically means if your policy is from Jan 1 2021 to Dec 31 2021 then the coverage period extends till the end of the period when insurance services are provided (Dec 31 2021)
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Not necessarily. At initial recognition the PAA estimate is also 0 if you have not received any premiums yet. Your formula for PAA should be UEP - DAC. Also, there are normally differences between PAA and GMA due to discounting and revenue recogniti…
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yup you are spot on
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@graham thoughts on this? On my side I just think you should know how to calculate duration for the capital required for interest risk. Don't think there is much beyond that
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Hi, yes in part(d) it should say PVFCF instead of LIC. And also mu is supposed to be unknown while sigma is given. You are also right that it should be clarified that the question is looking for RA by LoB. I don't really see on my end why insurance…
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@jjj820 You are thinking about the GMM method. Under PAA which is the simplified approach, the formula for calculating LC is the difference between the PAA and FCF. Or put it another way, PAA excl LC + LC = GMM
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@lotsofpies yes to your first question. But again, as much as possible try to keep it at FCF = outflow - inflow. As for your second question, I would think maybe it should be max(0, FCF + LRC excl LC) -> A larger negative number means more LC in …
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yup @graham
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The premiums payable from the insurer to the reinsurer since this is reinsurance held
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Your margin is determined by your final harvest price. This difference vs a reference historical margin is what determines your payout.
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In a consulting firm you work for clients who are insurers. The consulting firm itself is not an insurer which means he only has experience with one insurer
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It is presumed that you have reinsurance on your earthquake coverage. Less EPR implies less exposure to earthquakes which then implies less credit risk since your expected receivables will be smaller
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Claim settlement is based both on your reference margin and harvest prices
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It is part of OIE. Line 415
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Yeah I would interpret it as after tax if the line for tax is before net income. Seems off. I agree it should be -10