Staff-T1
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So I don't really know what's going through the grader's head here but there could be two things: * When he says credit risk, he doesn't mean the actual credit risk factor. He means credit risk in the general sense and then the capital required…
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I don't think you'd need to know much more than that tbh
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It doesn't say so in the text but I think that's a reasonable assumption
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* Health Insurance: Provided by the government, although there are some private plans that supplement this. * Workers Compensation: Government * Employment Insurance: Government
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So I was mistaken in my initial response - You can estimate LRC FCFs at any level of aggregation and allocate as you like too. It's just the CSM or LC that needs to be calculated on a group of contracts basis. In any case, the battlecard should say …
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No - I don't think it is even possible to have UEP < DAC. And besides, one of the main themes of IFRS17 is to prevent insurers from front-ending profit
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Yeah whoops you are right. 3500 needs to be discounted also - It's hard to see so many brackets
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APV is the Actuarial Present Value of the premium liabilities. Also, I think you should use 10000*3% as the maintenance expense and not 5000 as alluded to above. Maintenance expenses are a % of GWP not UEP
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The wiki is the correct definition. @graham can you confirm?
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Not sure - I also got the same answer as you. @graham thoughts?
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No problem Always glad to help ~
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I'd say the BCAR is more related to the MCT whereas the Feldblum paper is more of interested in the "credit score" of the company if you will. So for this, the 4th bullet point is trying to elaborate on the 2nd bullet. It's sufficient to just kn…
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If it's run by the government you can mandate insurance which will increase the take up rates
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The answer is mentioned in my previous post ^
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It's when you do stochastic reserving (i.e. ODP bootstrap, MCMC models, etc) and find that your coefficient of variation is very high
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No, they take the full amount in each range multiplied by the cession % in each range
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There's no need to because you can see that the proposed is clearly between 0 and the indicated
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In the layer: 0-25K: There is no reinsurance 25K-100K: We have a 90% cession to reinsurers 100K-200K: We completely ceded all losses 200K-250K: We ceded 50% of losses Sum that up and you get your reinsurance coverage
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Yeah generally each year is a cohort
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So I think if it's in the source material it's fair game. Graham will not be able to put everything in to the wiki. The purpose of the wiki is to highlight and condense the most important points. As to anything else you need to memorize, it's a judg…
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It's paid to the reinsurer to avoid automatic commutation. I am not sure what you are implying for your second point? The focus is still on ceded risk but we just use the reinsurer's assumptions because we have no data on our end. We do not have ou…
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First, my understanding is that when your underlying group is profitable, ceding it to the reinsurer creates a net cost for you (as the insurer on a reinsurance held position). Right Does that mean the reinsurance contract held has net initial ga…
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@wilsonchan18 : A risk limiting feature is any feature that makes it less likely for an insurer to receive sufficient recovery basically @suomi : Indirectly. (usually) the premium only starts swinging after the attachment point has been breached. I…
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For onerous contracts: 1. Correct. 2. PAA LRC = GMA LRC = LRC(ex LC) + LC For non-onerous contracts: 1. Correct 2. Correct If you are calculating a CSM, by definition it's not PAA but rather GMM. There is no such thing as a CSM under PAA
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Uhhhh yeah I would just ignore that last statement. That statement doesn't make sense to me too
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I think it makes it seem like we are front-ending in the first sentence. Maybe we do not have to earn it? I am not sure
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Yes, that is basically what is said on page 24 of the LRC educational note. If it is earned yes. But need to be cognizant if those premiums are from a different cohort (i.e. written in a different CY) then they would be in their "own" LRC group
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Well the PV(with margin) is your final answer? It's not needed for anything ofc given that it's your final answer. It's the sum of 3922 and 117
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It is to provide for credit risk on the reinsurer's end (i.e. they may not be able to provide compensation for their assumed losses)
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It is removing the Reinsurer's assumed claim provision. But yes, the reinsurer is free of liability after