Exam Mnemonics Flashcards
Factors affecting an investment strategy
SOUNDER TRACTORS
Size of liabilities
Objectives of insurer
Uncertainty of liabilitied
Nature of liabilities (real?)
Diversification
Existing portolio
Restrictions - statutory / legal / voluntary
Tax implications
Risk paetite
Accraul of liabilities
Currency of existing liabilities
Term of the existing liabilities
Other insurers (competition)
Reinsurance
Solvency requirements
Crtiretia for exposure measure
VENOM ADA
Veriafiable
Easy to obtain
Non-munipulatable
Objective
Measurable
Acceptable to market
Describes the risk
Acceptable by policyholders
Experience analyses
PEACE REP
Pricing and sales of policies
Environmental changes
Anything else the management require
Claims reserve estimation/ claims experience
Expense analysis and allocation
Risk exposure and aggregration
Estimation of claims trend
Policyh behavior
Reasons for purchasing reinsurnace
PASS LIFE
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
Problems with inwards RI reserving
CLUB SIGH
Cedants use different reserving bases
Longer reporting delays
Upwarrds development of claims
Benchmarks less relevant
Sparse data
IT constraints
Grouping of data
Heterogeneous exposure
Criteria for an insurable risk
MUD PIS
Moral hazard avoided
Ultimate limit to liability
Data available to assess the risk
Probability of occurence is low
Independent risks
SImilar risks pooled
Analysis of policy experience
CALMNESS Q
Cancellations
Alterations in premium rates
Lapses
Mix of business
New business volumes
Endorsements
Strike rate
Source (persistency/ profitabiulity)
Quotation volumes
Reasons to monitor business written
DAIGRAM
Double check assumptions
Influence the market
Assess performance vs goals
Gain market intelligence
Regulators (satisfy)
Assist with reserving
Manage risk
Key stakeholders of a general insurance company
CRAMPERS
Credit rating agencies
Reinsurers and brokers
Auditors
Management
Policyholders
Employees
Regulators
Shareholders
