CIA.Valn

Question 1

what specific factors are easier to isolate concerning COVID-19’s impact on policy liabilities?

Answer 1

• premium reductions
• refunds
• cost of material and labour

Question 2

Identify 4 impacts that an actuary should consider when performing actuarial work.

Answer 2

1. Product reforms
2. Judicial, legislative, political events
3. Catastrophic events
4. Climate change

Question 3

How should an actuary incorporate inflation assumptions in a reserve analysis?

Answer 3

• consult with U/W - underwriters, business analysts, fraud detection experts, claim adjusters
  to understand whether inflation has transpired in claim payments, and is accounted for in case reserves)
• consult the CPI (Consumer Price Index)
• perform a sensitivity analysis : (with varying inflation assumptions to assess the sensitivity of reserve estimates)

Question 4

Why may the development method not work for long-tailed lines with sudden changes in inflation ?

Answer 4

• The effect of inflation on recent development periods may emerge …
  ..more quickly for short-tailed lines but..
  ..more slowly for long-tailed lines.