Interview Question for CT5 – 7
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Rishabh Surana
Q. What are the two methods of calculating reserves? Under which conditions, in general, these are equal? Ans: Reserves may be calculated by:
[BLACK SMALL SQUARE]Prospective method (looking forward) – By discounting estimated future cash flows.
[BLACK SMALL SQUARE] Retrospective method (looking backward) – By accumulating past cash flows.
If this is calculated on the same basis as used in pricing basis and reserving basis, then the reserve calculated under both the methods will be the same.
Also Read : Exercise on MIN and MAX function
http://forum.theactuarialclub.com/exercise-on-min-and-max-function-t2762.html Sent from my SM-A605G using
Actuarial Info mobile appschavda
RISHABH wrote:
Q. What are the two methods of calculating reserves? Under which conditions, in general, these are equal?Ans: Reserves may be calculated by:
[BLACK SMALL SQUARE]Prospective method (looking forward) – By discounting estimated future cash flows.
[BLACK SMALL SQUARE] Retrospective method (looking backward) – By accumulating past cash flows.
If this is calculated on the same basis as used in pricing basis and reserving basis, then the reserve calculated under both the methods will be the same.
Also Read : Exercise on MIN and MAX function
http://forum.theactuarialclub.com/exercise-on-min-and-max-function-t2762.html Sent from my SM-A605G using
Actuarial Info mobile app
Is there a way someone can offer/illustrate this reserving calculation example in an Excel file? It would be useful to model a real life product.Mayank Goyal
I’ll give you the elements but all these steps should be taken by you. A triangle, thereafter, GWP, NWP, GEP, NEP, LR, development factors, ULR, all three methods of calculating reserve, then select the best method according to development of data.
You can follow the steps, clearly I haven’t given them in excel but again it is your take if you want to learn, DIY is the best case scenario to go ahead. I’ll be waiting to get reply here with some excels. Will push in someone far more experienced if I see that you guys are working hard on it!
You can create teams on forum and discuss as well.
Great to see the interest!
Sent from my LLD-AL10 using
The Actuarial Club mobile appsarveish
Mayank wrote:
I’ll give you the elements but all these steps should be taken by you.A triangle, thereafter, GWP, NWP, GEP, NEP, LR, development factors, ULR, all three methods of calculating reserve, then select the best method according to development of data.
You can follow the steps, clearly I haven’t given them in excel but again it is your take if you want to learn, DIY is the best case scenario to go ahead. I’ll be waiting to get reply here with some excels. Will push in someone far more experienced if I see that you guys are working hard on it!
You can create teams on forum and discuss as well.
Great to see the interest!
Sent from my LLD-AL10 using
The Actuarial Club mobile app
These steps are for non-life insurance (CT-6) right?
If you want to go across some Excel projects, here we have some. Enjoy!
https://theactuarialclub.com/projects/ Sent from my LLD-AL10 using
The Actuarial Club mobile app
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