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5 Cards in this Set

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Premium rating- general
1) collect exposure and claims data
2) estimate o/s clms and IBNR
3) adjustments for - large claims.
4) trends.
5) changes in risk, cover, RI cost.
6) inflation of future clms costs.
7) risk premium assessment
8) anlayse freq and severity.
9) office premium - add loadings
10) expenses, investment, contingencies, profit, commission, reinsurance.
11) commercial issues - loss lead, cross subsidise accurate premium?
Experience rating
1)incorporate actual experience
2)retrospective or prospectively.
3) exposure and claims data - for individual risk and also global or wider experience.
4) estimate o/s and IBNR.
5) adjustments
6) risk premium - weighted avg of individual risk premium and global experience.
7) analyse freq and severity.
8) office premium - risk premium + loadings
9) loadings - expense, RI, Profit, commision, contingencies, investment rerurn
10) commercial aspects
1)data - claims, exposure
2)analyse data - rate of dev, smoothness of development, large losses, volume, appropriate method selection, anomalies( distortions, inflation, nil, multiple, partial and recoveries).
3) adjustments for errors, ommmssions, distortions
4) inflation adjustments
5) project ultimate claims from each cohort ( AY, RY or UY)
6)reserve = ultimate - paid to date.
7) discount reserves if reqd.
8) claims dev choice - cumulative incurred or paid or average amts & clm counts.
issues to consider in assesing suitability of assets to liabs
Liabilities characteristics
1)nature - real or fixed
2)inflation type - prices, earning, court award.
3) term - short tail - report and settle quick.
4) long tailed - report or settle delay. latent claims
5) frequency
6) severity - predictable or can be very large?
7) possibility of accumulations or catastrophes - uncertainty - hence need for liquidity or marketability.
8) court award, legislative changes, economic link.

Assets suitable
1)security, default risk
2) volatility of capital values - imp for solvency margin.
3)income volatility
4) diversification
5) term available to match liabs?
6) liquid? marketable?
7) expected return - high/low
8) expenses, taxes, admissible. premissible
9) inflation protection - type?

general issues

1) free reserves
2) past , current
3) reinsurance type, amount
4) other reserves - catastrophe, claims equalisation
5)size, age of company, range of products sold?
6) extent of mismatching ok?
liabs - natcu
assets - system t
general - Sm, mismatching extent,regulations,competiotion, past and current practice, risk appetite
impact on company
underwriting profit