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#1
11-06-2006, 05:03 PM
 jk Member CAS Join Date: Nov 2002 Posts: 901

We seem to agree that the retro premium was capped at the maximum, but I'm sure they won't give full credit unless you get the "raw" premium correct, and we're diverging on that.

I said that:
SP = (100,000+20,000)*1.05 = 126,000
BP=20,000+15,000 = 35,000
Primary converted losses = 455,000*1.1 = 500,500
Excess charge = 126,000*.25*1.1 = 34,650
Retro premium = (35,000+500,500+34,650)*1.05 = 598,658

How did people arrive at other answers?
#2
11-07-2006, 09:38 AM
 Purple Princess Member CAS Join Date: Aug 2002 Location: Montreal Posts: 817

Quote:
 Originally Posted by jk We seem to agree that the retro premium was capped at the maximum, but I'm sure they won't give full credit unless you get the "raw" premium correct, and we're diverging on that. I said that: SP = (100,000+20,000)*1.05 = 126,000 BP=20,000+15,000 = 35,000 Primary converted losses = 455,000*1.1 = 500,500 Excess charge = 126,000*.25*1.1 = 34,650 Retro premium = (35,000+500,500+34,650)*1.05 = 598,658 How did people arrive at other answers?
I had BP = 20,000 - (1.1-1)*100,000 + 15,000 = 25,000
because expense is expense in GCP (e) not expense in basic.
#3
11-07-2006, 12:07 PM
 frank_exams Member CAS Join Date: Aug 2005 Location: Oakland, CA Studying for CFA III Posts: 1,280

I had the same BP as PP.

Frank
__________________
4sigma - Yeah, it's catchy. You just didn't accuse someone of being a wimp for doing your thesis on them with it.
#4
11-07-2006, 01:06 PM
 Maitre_Absolut Member CAS Join Date: Jul 2004 Posts: 81

Quote:
 Originally Posted by frank_exams I had the same BP as PP. Frank
So did I.

Its an elementary formula, BP = e - (c-1)E + cI

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