Mock Exam Questions Flashcards
In a soft market what happens to premiums and exposures
Reduced premiums and increase in exposures
Which body is responsible for monitoring emerging risks to the uk financial system
Financial policy committee
Insurers provide the employers liability tracing office with policy info how long after inception
90 days
Which body is responsible for the conduct of the Society of Lloyd’s
FCA
What are standard industrial classification codes used for
Compiling health and safety statistics
Under a delegated authority the frequency for a Bordeaux to be submitted is
Monthly
Which types of average can most commonly be distorted as a result of outliers in the data sets
Mean and median
Which technique involves generating a large number of statistically stimulated scenarios
Stochastic modelling
What LOV would an underwriter use claims triangulation to predict claims
Employers and public liability
IT costs is what type of expense
Fixed expense
What LOB does the claims and underwriting exchange hold on its data base
Household and motor
What LOB does the claims and underwriting exchange hold on its data base
Household and motor
What level of certainty of future losses will a cat model likely provide
Low certainty
What level of certainty of future losses will a cat model likely provide
Low certainty
Stop loss reinsurance provides protection for
A portfolio of business over a 12 month period
What is the objective of an insurer operating a self auditing process / peer checks
Identify corrective action to take place at the earliest opportunity
Consequence of a soft market for an insurer
Rising expense ratios
During a hard market phase, what will happen to profits
Higher profits due to high premiums for same level of cover/ exposure
Cancellation clause allows cancellation by
Both the insured and the insurer
Why would an underwriter give delegated authority to a specialist cover holder
To access more customers with a lower distribution cost
What intermediary will be used for any form of business
An intermediary
What is the usual role of the Insurance Fraud Enforcement Department
To identify altered client info and invalid policy docs
Disadvantage of using the median average figure
The middle value is an unfair representation of the full dataset
What should the increasing standard deviation of claims indicate to the underwriter?
The volatility of claims experience is increasing
Main advantage of liaison between underwriter and claims relates to
Ongoing viability of loss ratio data
Who would be responsible for pricing adjustment following analysis of competitors in the market?
An actuary
Which risk analysing approach incorporates claim triangulation?
Burning cost method
What mechanism does Defaqto use to depict comparisons in different insurers policies
Star rating
How can underwriters avoid the unreliability of past data and predict future claims
Use their sound judgement based on experience
Which type of average should be used for measuring preferences
Mode only
Underwriter can calculate the expected value of claims by combining…
Frequency and severity with associated probability
How can an insurer implement its corporate strategy and prevent internal tensions
Regular communication of its objectives to each key division of the business
An insurance companies capital resources requirement is the higher of its
Minimum capital requirement and its enhances capital requirement
Who would be responsible for pricing adjustment after analysing competitors
Underwriting manager
If a burning cost has continued to increase what does it mean in terms of claims
The total level of incurred claims has increased in relation to fleet size
What’s most important reason why underwriters should liaise with claims
Ongoing visibility of loss ratio data
What will happen to expense ratios during a soft market
Rise
what should insurers do to quickly grow a portfolio to premium and profitability
Charge cheaper premiums and compromise profitability
Which body is responsible for the conduct of society of Lloyd’s
FCA
Capital requirements 2005
Minimum capital requirement and enhanced capital requirement
