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  #301  
Old 01-11-2020, 01:22 PM
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You are so ahead, I'm still on section A....

That being said, Here's what I remember from exam 9
for my second attempt I'm targeting my weakest areas first
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  #302  
Old 01-11-2020, 03:58 PM
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Is there anything we need from the study kit if we don't plan on reading the source? Like with 8 we needed it for the ISO and NCCI rating plans.

I've finished going through the Taylor TIA videos now, so I'm getting close-ish to finishing section A. Still seems like a ton of stuff to memorize. Just in Taylor and Shapland there's a ton.
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Old 01-11-2020, 04:01 PM
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Is there anything we need from the study kit if we don't plan on reading the source? Like with 8 we needed it for the ISO and NCCI rating plans.

I've finished going through the Taylor TIA videos now, so I'm getting close-ish to finishing section A. Still seems like a ton of stuff to memorize. Just in Taylor and Shapland there's a ton.
The study kit is basically just the source for ERM
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Old 01-11-2020, 04:22 PM
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The study kit is basically just the source for ERM
Okay, sweet. Thanks for the info.
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  #305  
Old 01-12-2020, 01:01 AM
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can someone with more accounting experience please help me understanding component 5 of the loss reserve in Patrik:

" Insurance companies are allowed to take statutory accounting credit for future investment income on the assets supporting WC PT cases, auto PIP annuity claims and medical professional liability claims. Some companies do discount these claims reserves, and some don't. And, of course, as mentioned above, the US tax reform act of 86 requires discounting of loss reserves for income tax purposes. "

the loss reserves make sense as the money you expect to pay in the future to support liabilities. if you have assets that you expect to generate future investment income, why would you include them under the same category as loss reserves? it's money that you expect to receive instead of pay. is this something you subtract from the reserves?
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Old 01-13-2020, 07:54 AM
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Originally Posted by AbedNadir View Post
the loss reserves make sense as the money you expect to pay in the future to support liabilities. if you have assets that you expect to generate future investment income, why would you include them under the same category as loss reserves? it's money that you expect to receive instead of pay. is this something you subtract from the reserves?
The assets are not included in the same category as loss reserves. In theory, every dollar of reserve is backed by an asset to generate investment income until that reserve is paid out. This investment income offsets some of the reserve liability that you have. Therefore, an insurer could discount their loss reserve by subtracting the expected future investment income of the assets that back the reserve. This discount makes up Component 5.
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  #307  
Old 01-13-2020, 11:03 AM
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The assets are not included in the same category as loss reserves. In theory, every dollar of reserve is backed by an asset to generate investment income until that reserve is paid out. This investment income offsets some of the reserve liability that you have. Therefore, an insurer could discount their loss reserve by subtracting the expected future investment income of the assets that back the reserve. This discount makes up Component 5.
thanks
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Old 01-13-2020, 03:48 PM
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event risk on page 13 of Brehm include:

" a new entrant into the market reduces rates to grab market shares"

I thought this would fit better under projection risk. This category includes " driving increases because fuel is cheaper"

the new entrant would only indirectly affect frequency and severity because it affects your mix of business, but doesn't cause loss by affecting those that you insure.

any insight on this from anyone?
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Old 01-14-2020, 07:34 AM
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Originally Posted by AbedNadir View Post
event risk on page 13 of Brehm include:

" a new entrant into the market reduces rates to grab market shares"

I thought this would fit better under projection risk. This category includes " driving increases because fuel is cheaper"

the new entrant would only indirectly affect frequency and severity because it affects your mix of business, but doesn't cause loss by affecting those that you insure.

any insight on this from anyone?
For Event Risk, the key is "large unpredicted event" (though I agree that the way it is worded makes "causal link" seem like the key). A new entrant into the market is not something that an insurer can predict, and has a large effect on the frequency/severity of losses (even if indirectly, it is still causal).

For projection risk, the key is "changes over time" that the insurer is aware of, but there is uncertainty in the projections. Fuel price fluctuation is something the insurer is aware of, but projecting fuel prices comes with uncertainty (risk).

Last edited by Unrealistic Ace; 01-14-2020 at 07:35 AM.. Reason: a word
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Old 01-14-2020, 10:35 AM
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reading mack 1994. so far feels easier than 6. things are more intuitive and interlinked so it sticks in my head. this is my 1st statement since some "serious study" in early Jan. we will see...
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