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The question doesn't say they have a 5% discount. Try not to introduce new details if you can help it, it's likely to lead you in the wrong...
True enough. In the exam, I imagine it's worth making the distinction between the two. The marking scheme is likely do the same, and after all...
Read the sentence in context. The comparison is between the new discount and the current discount. The examiners aren’t comparing companies with...
Take a look at the attached file, I find it helps to write things out as a little diagram. Yes This is the direct business the cedant intends...
You make a valid point that a claim can exceed the upper limit, that's why insurers buy layers of XL. Eventually, the insurer will have to make a...
If the cedant retains the maximum 1m and cedes the maximum number of lines (ie 10), then the largest EML that can be ceded through the surplus...
Yes that's right. Just imagine claims are Poisson but the cover only pays out on the first one (or two) claims. Your suggestion ignores the...
I'm still mulling over your question George. We're told that the number of claims to the layer are Poisson (and remember the Poisson...
I assume you are referring to Question 9? That's a very broad question Siddhi, you're more likely to get a response if you state which part of...
I interpret the question as follows: The base statistic is the historical loss data for class X in State Y. Then the complement of credibility...
Yes, it sounds like the reinsurance only pays out for a single hit to the layer. You'll see the question then goes on to consider the premium...
The actuary is analysing the complement of credibility for class X in state Y, but class X is also written in other states throughout the US. As...
The questions doesn't say the reinsurance covers only one risk. In fact, whether it does or not is immaterial, because there is no reason why a...
Ah I see, yes now I understand your question! You make an excellent point. A BF calculation (based on an accident year triangle) will indeed...
'At least one claim' means 'either 1 claim, or 2 claims, or 3 claims, or 4 claims ... and so on.' In short, it means 'any possibility EXCEPT no...