Is this the risk that for reviewable annuities, companies have to increase the annuity amount after a review due to various reasons, e.g. competition? Normally there is less risk if the contract is reviewable in terms of premium/benefit I thought, as the companies are more in control of things. Thank you.
It depends on the context. It could be the risk that you revise the wrong topics for the exam! But, assuming a few days before the exam isn't the right time for jokes, yes, in the context of Solvency II SCR, it's to do with reviewable annuities. The key point here is that the review is not something we have control over, as would be the case for a reviewable expense charge. The example at the top of page 14 of Chapter 15 is a good one. If a health insurer is paying out an annuity as a result of a claim on accident insurance, there's a risk that the annuity has to be reviewed upwards if the condition gets worse.
Haha very funny! Thank you clarifying the SCR revision risk Mike, this close to exam. I actually did not understand the health insurer example at the time reading the notes. Now I am a bit worried about the other revision risk, need to change topic now!
