siewert 2007 #41

[atkinsmt]

Do "aggregate deductible" and "annual aggregate deductible" mean different things?

In 2007 #41 question aggregate deductible means the most the insured will pay during the policy. Period.

While annual aggregate deductible (as defined in Harrison) means that the insured (insured in this case means the insurer) will pay all losses below the deductible + losses XS the deductible until such payments reach the AAD.

I saw some threads that didn't seem to clarify things.

[gaddy]

I don't know if I follow your second definition. Where are you getting that? I don't think AAD should be different from your first definition; unless you're talking about exceeding the reinsurer's limit (then the insurer would pay more than the aggregate in a given year).

[atkinsmt]

I don't know if I follow your second definition. Where are you getting that? I don't think AAD should be different from your first definition; unless you're talking about exceeding the reinsurer's limit (then the insurer would pay more than the aggregate in a given year).

It's from Harrison, chapter 8, page 8. 2008 #28 is an example. The solution to this AAD question is different than the Siewert aggregate deductible question I referenced above.

[gaddy]

I'm taking the 08 exam on saturday... will provide input then if no one else does.

[Vorian Atreides]

I checked the 2007 syllabus . . . it appears to have the same texts for reinsurance as the current (a few extra references, but none of them seem to avail themselves to the OP).'I agree with gaddy that the two terms should mean the same thing, in general; however, the time frame might be different between the two. AAD is clearly on an annual basis; agg dedt could be just wrt the treaty's term (which might be something other than annual).As for the sample solution presented in 2007; I would say this is another example of an imperfect solution that got most of the available points. I'll take a look at Harrison to see if there are any other referrences to agg dedt apart from the AAD.

[2M]

The terms are different as they are presnted in different context.

AAD is pertaining to a property XOL contract (as found in Harrison)

The Siewart aggregate deductible is the maximum an employer pays on a workers comp policy

[Vorian Atreides]

Reviewing Siewert, there is reference to an aggregate limit, but not an aggregate deductible.

I would say that this is an example that Feldblum is fond of talking about . . . an Exam question developed by someone who doesn't really understand the article the Exam question is based on.

Based on the sample solution, the term that should've been used would be aggregate limit and not aggregate deductible. (Feldblum would also say that the best thing to do would be to recognize the problem type and answer the intended question and not argue semantics.)

And as 2M points out, perhaps the best thing to key on is whether or not we're pricing a property (per occurrence or cat) XOL treaty. In this case, agg dedt == AAD; otherwise, agg dedt == agg limit per Siewert.

[gaddy]

Exactly - 2M makes the concise point that for our purposes, WC is the only line we're going to talk about an agg limit. I suppose it may exist for some others (GL?), but not really in any syllabus reading.

[atkinsmt]

Thanks everyone for the insight.