#15
Why does the result for part b. indicate that a 347% value for IRIS 2 as being usual? As I understand it, the usual range for IRIS 2 is <=300%. Thanks!
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Why does the result for part b. indicate that a 347% value for IRIS 2 as being usual? As I understand it, the usual range for IRIS 2 is <=300%. Thanks!
Comments
You are correct. This is a typo in the solution.
I've added a footnote to the Battle Table about that. (Footnote 6)
I don't understand the solution for part a. It seems like it should be that 30% of Ceded Premium=Ceded Commissions... so that means 0.3=(Ceded Comm)/(Ceded Prem) and then UEP=220-120=100. So why not Surplus Aid=0.3*100=30? It's not clear to me from the Summary sheet or sources that I've seen that the UEP in the Surplus Aid calculation is supposed to be "Ceded UEP".
For part c... why isn't surplus aid subtracted out of PHS for IRIS 11?
Thanks.
Surplus Aid is 30% of ceded UEP.
The IRIS 4 text shows UEP as made up of three pieces. The clue is in the first piece. It is called "UEP - Unauthorized, Authorized, etc". These are terms used for reinsurers.
IRIS 11 is not one of the ratios that need to be adjusted for surplus aid when IRIS 4 is unusual.
Part C.) Can someone please explain the logic behind the one year loss development calculation not just being 150 - 80 (outside of the quota share). I don't understand how if we have cumulative unpaid losses at two different valuations, the development isn't just the difference?
Sorry I don't know how to delete a comment but I just realized that's not the IRIS 11 formula - please disregard or feel free to delete this (brain is fried)
That's ok, good luck.