Other Mnemonics Flashcards
Criteria for an insurable risk
MUD PIS
Moral hazard avoided
Ultimate limit to liability
Data available to assess the risk
Probability of occurrence is low
Independent risks
Similar risks pooled
Criteria for an exposure measure
VENOM ADA
Verifiable
Easy to obtain
Non-manipulable
Objective
Measurable
Acceptable to the market
Defines the risk
Acceptable to the policyholder
Reasons for purchasing reinsurance
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
Factors affecting investment strategy
ADVERSE SUNTAN CORRECTOR
Claims characteristics
CRAFT CRAMPS VENDS DRILLS
Catastrophes
Reporting delays
Accumulations
Frequency
Trends
Currency
Reinsurance
Amount (severity)
Moral hazard
Partial payments
Settlement delays
Volatility
Event delays
Nil claims
Definition
Seasonality
Distribution
Reopened claims
Inflation
Latent claims
Large claims
Salvage and subrogation
Stakeholders of a general insurance company
CRAMPERS
Credit rating agencies
Reinsurers and brokers
Auditors
Management
Policyholders
Employees
Regulators
Shareholders
External environment
STILL CUBIC WAGE
Seasonality
Technological change
Investment conditions
Latent claims
Legislation
Catastrophes
Underwriting cycle
Behavioural trends
Inflation
Court awards
Weather
Awareness of the ability to claim
Global warming
Exchange rates
Problems with inwards RI reserving
CLUB SIGH
Cedants use different reserving bases
Longer reporting delays
Upwards development of claims
Benchmarks less relevant
Sparse data
IT systems
Grouping of data
Heterogeneity of data
Factors affecting data
SEMI COMA
Size of company
Existence of legacy systems
Management and staff
Integrity of data systems
Class of business
Organisation (nature of)
Method of sale
Age of company
