Acronym Flashcards

Question

Disadvantages of regulation

Answer 1

Disadvantages of regulation Economies of scale (fewer) Premiums increased Investment return lower Costs Barriers to entry Less insurance coverage Opportunity cost Complex capital calculations

Answer 2

INNER CRAP

Answer 3

Claims analyses ``` Impact/incidence of large claims New claim types Nil claims Expenses vs indemnity cost Re-opened claims ``` Changing frequency and severity Recoveries on gross claims Assessing concentration Partial payments

Answer 4

MIS PI PIP

Answer 5

Capital modelling uncertainty Model Incorrect dependencies Simulation Programming Incomplete data Poor data Inconsistent data Parameter

Answer 6

Categories of uncertainty Model error Random error ``` Data error Adjustment factors Market conditions Portfolio movements Parameter error ```

Answer 7

Criteria for an insurable risk Moral hazard avoided Ultimate limit to Liability Data available to assess the risk Probability of occurrence low Independent risks Similar risks pooled Essential features (FIA) Financial/quantifiable Interest in risk being insured Amount payable relate to size of loss

Answer 8

Reasons for purchasing reinsurance Profitability (increase) Avoid single large losses Smooth results Solvency (improve) Limit exposure to single events or accumulations Increase capacity to accept risk Financial assistance Expertise

Answer 9

Experience analyses ``` Pricing and sales of policies Environmental changes Anything else the management require Claims reserves/claims experience Expense analysis and allocation ``` Risk exposure and aggregations Estimation of claim trends policyholder behavior

Answer 10

REDUCE DOG CRITIC

Answer 11

Assumptions needed for a capital model ``` RI share of ultimate claims and RI bad debt Exhaustion of reinsurance and reinsurer Downgrade assumptions Ultimate gross claims Ceded premiums Expenses ``` Dividends Operational losses Gross written premium ``` Catastrophe claims Reserve movements (gross) by COB Inflation Tax Investment returns, split by asset class Claims payment profiles ```

Answer 12

Investment and capital analyses Risk assessment Investment policy Capital requirements Evaluate existing portfolio Allocate capital between classes Determine return on capital

Answer 13

SAD ADVERTS PROMPTS ACIDIC CALM

Answer 14

Examples of regulation Solvency level Amount/type of business written Disclosure ``` Auditing Deposit assets to meet liabilities Valuation basis (assets and liabilities) Equalization reserve Risk based capital calculations Type/amount of assets to demonstrate ``` ``` Publish premium Reinsurance requirements Offer required cover Mandatory restrictions on cover Premium rates Treating customers fairly Statement of actuarial opinion ``` ``` Authorization of companies/ agents/ management Cooling off period Illegal products Discounting of liabilities Information used in underwriting Compensation scheme ``` Countries where business is written Anti-competitive behaviour Levies to consumer protection bodies Mismatching requirements

Answer 15

Factors affecting data Size of company Existence of legacy systems Management and staff Integrity of data systems Class of business Organization (nature of) Method of sale Age of company

Answer 16

Solvency assessment Performance measurement Asset allocation RI Purchasing Strategy setting Pricing Assessment enterprise level risks

Answer 17

STILL CUBIC WAGE

Answer 18

External environment ``` Seasonality Technological change Investment conditions Latent claims Legislation ``` ``` Catastrophes Underwriting cycle Behavioral trends Inflation Court awards ``` Weather Awareness of the ability to claim Global warming Exchange rates

Answer 19

VAN FUR UP CAVE

Answer 20

Features of good model Valid Adequately documented Not overly complex Flexible Understandable by managers Reflect risk profile Uncertainty should be verifiable Parameters identified and justified Complete Appropriate parameters Verifiable Easy to communicate results

Answer 21

Criteria for an exposure measure ``` Verifiable Easy to obtain Non-manipulative Objective Measurable ``` Acceptable to the market Defines the risk Acceptable to the policyholder

Acronym Flashcards

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