Hi So what did people think? I didn't think there were any really nasty questions (like on some of the last few papers), but I struggled a bit on parts. I thought the hardest questions were showing the expression for G(x) (question 5(i)?) - I had no idea on that - and the last one just because it was worth sooo many marks and I couldn't think of enough points to make for each part. Fingers crossed
The parts I thought were ok were 1, 2(i), 3(iii) (didn't even know what they were looking for in parts i and ii), my mind completely blanked on stop loss definition so basically couldn't do the whole question, 5(iii) - I left out parts i and ii, and for 6 part i I just copied most of the question! I didn't know what they wanted for part ii and not enough time to look at part iii. Unfortunately for me, I haven't done enough to pass. So pleased I took CT6 (then 106) 8 years ago - thanks Institute!!! Oh well. What did others think? Sorry to be so negative!
The paper seemed reasonable at least if you are to compare it with other past papers. There was obviously part 5i) which I still wonder why they asked it? Will a proof indicate whether someone is suitable to pass ST3? Anyway, I was not really bothered because I believe that many did not bother with it either and the total exam mark starts from 94 rather than 100. Part 5ii) I did not do much with either as from my understanding we had to integrate a Pareto distribution? And I am not sure the time spent was worth the points.- Unfortunately, I did not get to write down how I would approach it if I was to approach it... 3i) and ii) I was not really clear with the questions either, I would be happy if someone could explain them a bit more. Attempted them, but not sure what I got out of it. The rest of the exam seemed OK Question 6 seemed reasonable (especially for a 30points question). However I get the feeling that it may not have been as easy as it seemed to be (I hope I am wrong)....
True about 5i. I think overall I found it very difficult and also surprised not to see anything on reinsurance arrangements, I thought the stop loss question was very non-standard but at least it was split into parts which weren't too many marks. But forgetting the definition didn't really help! The thing I didn't get about the claim calculation was how to allow for the AAD - and I ended up using 100% of both reinstatement premiums (not sure this is correct though!) Did anyone attempt 5iii? Also, for Q1 I only put down 12 points, even though it was a list question as it asked for reasons. Did anyone put more points down? The last question was just very weird and I didn't think it was worded too well either.
Feeling so deflated today after letting myself down so badly yesterday... Cut my losses and skipped Q5 altogether to have a stab at 6 before time ran out. Didn't write enough for 6 and probably all a bit too simplistic, especially on the pricing adjustments bit. Q1: only did about 12 points with reasons, same as person in last comment...simply had to move on at that stage! Q2: very poor attempt at explaining difference between excess and deductible (only remembered today that the sum insured sits on top of deductible...not how I explained it.oh well). parts ii and iii: all logic and coherence went out the window. I panicked and lost the plot a bit. Same with Q3 parts i & ii. And I don't know if I took the right approach either on part iii; I suppose I interpreted it as other reasons to estimate liabilites... Can't remember too much about Q4 or how much/how accurate my answer was. Not enough surely! I'm envisaging groundhog day in September
That is one bit I actually think I got full marks for! It was method of moments. You had three equations; E(X) (value given in part (ii)), Var(X) and coefficent of skewness (both values given in part(iii)). You just had to solve three simultaneous equations.
I wasn't sure how the AAD works either. Is it the aggregate of the claim values or the aggregate of the part the re-insurer would pay if the AAD didn't exist? I assumed the latter. I also used all of the reinstatment premiums.
You were right it is the sum of all of the claims to the layer for example if it is 500x500 and claim is 800, then 300 would be taken of the agg until it is fully eroded. Then it will start paying out including on the last claim which eroded it (if it didn't erode it exactly - unlikely).
With regard to the last two claims, what was the recovery? A assumed it was 2m on each of them (because 2m/half of the layer was still remaining for the final claim). Is this right? It didn't seem very logical but was convinced that that was how I'd seen it done in the example question in the notes and at tutorials...
The exam I thought in many ways it was more difficult than Sept 08, but a tad easier than April 08. I was just glad the 30 marks question wasn't a huge calculation question like in Sept 08. I just thought there were no easy marks, no "give-away" marks - the closest was Q1 but even then for 12 marks it was dangerous. Yeah i wrote 12 points but wasn't convinced it would give me full marks, because many of those points had the same reasons, eg "maintain solvency to pay liabilities". Excess vs deductible is very obscure bookwork, and honestly so was MIG. I kind of expected Q5(i) since after asking for EBCT Model 1 last year this was the last difficult derivation (but didn't attempt it very well all the same). Hope the pass mark is less than 50 on this one.
I got my last RI recovery as 2m too, with 2m forgone as the total cover (+reinstatements) had been burnt through.
