Sept 2015 Question 5iii

Discussion in 'SP7' started by Laura, Feb 28, 2024.

  1. Laura

    Laura Very Active Member

    Hi everyone,

    understand that there is an additional level of correlation between underwriting risk and liquidity risk and that relationship may be relatively complex to model as it would only tend to materialise in the tail. However am not sure what the following means/relates to:
    ". . . with any outcomes that are within ULR expectations
    . . . or below any level of additional free assets required
    . . . or that do not have any specific reinsurance recoveries that need additional funding
    . . . not being likely to generate significant liquidity risk issues"

    Would you be able to explain further on this?

    Thanks in advance for your help!
     
  2. Katherine Young

    Katherine Young ActEd Tutor Staff Member

    That's a long sentence Laura. Let's try rephrasing it:

    See how that helps?
     

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