Run-off / wind-up basis

Question 1

What allowance for expenses should be made in the event of wind-up?

Answer 1

The run-off expenses should be considered and allowance for this additional liability should be made when valuing the TPs

Question 2

How should the expenses be separated?

Answer 2

ALAE, ULAE and other expenses incurred due to wind-up

Question 3

What should be considered regarding recoveries in the event of wind-up?

Answer 3

Reinsurance recoveries should be considered and whether an allowance should be made for any write-off of these recoveries

Question 4

What allowance should be made for non reinsurance recoveries in the event of wind-up?

Answer 4

The success rate of recouping all recoveries and an allowance for this

Question 5

What should be considered in addition to ALAE and ULAE in the event of wind-up?

Answer 5

The costs arising from normal operations increasing as a percentage of income or technical provisions