Chapter 5

Question 1

What is the pure risk premium

Answer 1

The part of a premium necessary to pay for losses and loss related expenses only.

It excludes other expenses such as sales and marketing

Question 2

Who will do research on behalf of the board? (Strategy)

Answer 2

Strategy planner / senior managers

Question 3

what is swot

Answer 3

Strength
Weakness
Opportunities
Threats

Question 4

what do the strategy team do?

Answer 4

Use swot
Work out weather its m&a
Launch new projects
Reach new territories
Different distribution channels

Question 5

what are the different types of actuary include

Answer 5

Pricing to predict loss rates for a business
Reserving
Modelling specialist
Solvency capital specialist

Question 6

in actuaries what does it not include

Answer 6

Claims

Question 7

what does a modelling specialist do in actuaries

Answer 7

What impact storm or flood would have on a portfolio

Question 8

What is risk management

Answer 8

Identification, analysis and control of all risk

Question 9

what are the parts of a risk process

Answer 9

Inherent risks
Residual risks
Risk ranking
Risk register

Question 10

What do the parts of the risk process help do?

Answer 10

Can identify the risk and help determine how to control the risks

Question 11

what will the risk manager look at?

Answer 11

Strategic risk
Insurance pricing and reserving risk
Investment / market risk
Credit risk
Operational risk
Group risk

Question 12

in risk management what is credit risk

Answer 12

Both not being paid premium and not being reimbursed by the reinsurer due to the bankruptcy

Question 13

in risk management what is meant by operational risk

Answer 13

Not enough staff / better staff / better equipment

FUNCTION MANAGER

Question 14

what does the facility manager

Answer 14

Help staff morale
IT equipment
Desks / chairs
Creating a nice office
Find a premises

Question 15

How do actuaries help with reserving

Answer 15

initial reserve seat against a claim compare to the final actual costs in order to assess the trends

Question 16

How do actuaris support the solvency capital

Answer 16

They look at the risks to the business such as credit, market, operational, group, strategic and reserving to calculate the worst case scenario

Question 17

What is a logical process of a risk management identification analysis

Answer 17

1- identifying the firms strategic objectives
2- risk identification (brainstorming, site visit, scenario analysis, flow process analysis)
3- risk analysis (looking at the probability of a risk event happening and the impact on the objectives of the company)
4- risk reporting
5- monitoring and iteration

Question 18

In the risk analysis how will risk to be assessed

Answer 18

From both an inherent and residual viewpoint

Question 19

How does the inherent analysis describe the risk

Answer 19

Without any special controls applied except perhaps the basic common sense controls. For example what is the risk of injury you would expect people to take reasonable control

Question 20

What is the residual risk

Answer 20

Should somebody have safety training such as guidance on lifting heavy objects reduce the risk to acceptable residual risk

Question 21

What are the three main types of assets

Answer 21

Premiums, shareholders funds retained profit and loans, claim reserves

Question 22

How does the finance team help with solvency II

Answer 22

They are responsible for setting asset and liability, market and credit risks

Question 23

Who do internal auditors report to

Answer 23

The chairman of the audit committee who is a non-executive director of the board
The senior executive such as a finance director or chief executive

Question 24

Who is responsible for ensuring that all procedures required for salary payment or replace an operating effectively

Answer 24

The HR team

Question 25

What does the FM team do

Answer 25

Only takes maintenance, operation, cleaning and repair and security of the premises