Chapter 5 Flashcards
(25 cards)
What is the pure risk premium
The part of a premium necessary to pay for losses and loss related expenses only.
It excludes other expenses such as sales and marketing
Who will do research on behalf of the board? (Strategy)
Strategy planner / senior managers
what is swot
Strength
Weakness
Opportunities
Threats
what do the strategy team do?
Use swot Work out weather its m&a Launch new projects Reach new territories Different distribution channels
what are the different types of actuary include
Pricing to predict loss rates for a business
Reserving
Modelling specialist
Solvency capital specialist
in actuaries what does it not include
Claims
what does a modelling specialist do in actuaries
What impact storm or flood would have on a portfolio
What is risk management
Identification, analysis and control of all risk
what are the parts of a risk process
Inherent risks
Residual risks
Risk ranking
Risk register
What do the parts of the risk process help do?
Can identify the risk and help determine how to control the risks
what will the risk manager look at?
Strategic risk Insurance pricing and reserving risk Investment / market risk Credit risk Operational risk Group risk
in risk management what is credit risk
Both not being paid premium and not being reimbursed by the reinsurer due to the bankruptcy
in risk management what is meant by operational risk
Not enough staff / better staff / better equipment
FUNCTION MANAGER
what does the facility manager
Help staff morale IT equipment Desks / chairs Creating a nice office Find a premises
How do actuaries help with reserving
initial reserve seat against a claim compare to the final actual costs in order to assess the trends
How do actuaris support the solvency capital
They look at the risks to the business such as credit, market, operational, group, strategic and reserving to calculate the worst case scenario
What is a logical process of a risk management identification analysis
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
In the risk analysis how will risk to be assessed
From both an inherent and residual viewpoint
How does the inherent analysis describe the risk
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
What is the residual risk
Should somebody have safety training such as guidance on lifting heavy objects reduce the risk to acceptable residual risk
What are the three main types of assets
Premiums, shareholders funds retained profit and loans, claim reserves
How does the finance team help with solvency II
They are responsible for setting asset and liability, market and credit risks
Who do internal auditors report to
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
Who is responsible for ensuring that all procedures required for salary payment or replace an operating effectively
The HR team
