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It covers topics including collective risk models and assumptions, premium setting using expectation and variance, self-retention group structures, reinsurance pricing considerations for catastrophe and experience rating, industry-wide claims databases, adjustments to past claims experience for optional products, and monitoring early indicators for new fixed-benefit covers. It also evaluates risk excess of loss reinsurance features and exposure measures in mobility-scooter third-party liability.",{"@graph":69,"@context":123},[70,84,106],{"@type":71,"itemListElement":72},"BreadcrumbList",[73,77,79,82],{"item":74,"name":75,"@type":76,"position":8},"https://docshare.wps.com","Home","ListItem",{"item":78,"name":9,"@type":76,"position":14},"https://docshare.wps.com/document/",{"item":80,"name":20,"@type":76,"position":81},"https://docshare.wps.com/document/exam/",3,{"item":83,"name":65,"@type":76,"position":19},"https://docshare.wps.com/document/sp8-general-insurance-pricing-specialist-principles-specimen-examination-2019/399101/",{"url":83,"name":65,"@type":85,"image":86,"author":91,"headline":65,"publisher":94,"fileFormat":97,"inLanguage":63,"description":67,"dateModified":98,"datePublished":99,"encodingFormat":97,"isAccessibleForFree":100,"interactionStatistic":101},"DigitalDocument",{"url":87,"@type":88,"width":89,"height":90},"https://docshare.wps.com/thumbnails/sp8-general-insurance-pricing-specialist-principles-specimen-examination-2019/399101.png","ImageObject",300,407,{"name":92,"@type":93},"supergirl","Person",{"url":74,"name":95,"@type":96},"DocShare","Organization","application/pdf","2026-11-08","2026-09-27",true,{"@type":102,"interactionType":103,"userInteractionCount":105},"InteractionCounter",{"@type":104},"ViewAction",14,{"@type":107,"mainEntity":108},"FAQPage",[109,115,119],{"name":110,"@type":111,"acceptedAnswer":112},"What topics does SP8 examine in this 2019 specimen paper?","Question",{"text":113,"@type":114},"It assesses general insurance pricing, collective risk modeling, reinsurance pricing approaches, self-retention arrangements, industry database impacts, and premium-setting adjustments for optional and new products.","Answer",{"name":116,"@type":111,"acceptedAnswer":117},"How is the collective risk model presented and used in Question 2?",{"text":118,"@type":114},"It defines total claim amount S as the sum of individual claim amounts Xi over a random number of claims N, and asks candidates to state model assumptions and comment on a risk premium formula based on E(S) and Var(S).",{"name":120,"@type":111,"acceptedAnswer":121},"What does Question 8 focus on regarding excess of loss reinsurance?",{"text":122,"@type":114},"It asks for the features of risk excess of loss reinsurance and then evaluates the choice of exposure measure and the pros/cons of alternative exposure measures for pricing a treaty covering third party liability claims.","https://schema.org",{"og:url":83,"og:type":125,"og:title":65,"og:site_name":95,"og:description":67},"article",{"robots":127,"canonical":83},"index,follow",{"doc_id":129,"site_id":62},399101,1790600319,{"code":4,"msg":5,"data":132},{"doc_id":129,"user_id":133,"nickname":92,"user_avatar":134,"doc_module":4,"category_id":19,"category_name":20,"doc_title":65,"doc_description":67,"doc_content":135,"file_id":136,"file_url":137,"file_type":138,"file_size":139,"view_count":105,"is_deleted":4,"is_public":8,"is_downloadable":8,"audit_status":8,"page_count":29,"language":140,"language_code":63,"site_id":62,"html_lang":63,"table_of_contents":141,"faqs":142,"seo_title":143,"seo_description":67,"update_tm":144,"read_time":145,"preview_page_count":4},962088121634,"https://ap-avatar.wpscdn.com/davatar_9964176cb1d06d4a9deccf72a44ae3dc","INSTITUTE AND FACULTY OF ACTUARIES  \nCurriculum 2019 SPECIMEN EXAMINATION  \nSubject SP8 – General Insurance Pricing Specialist Principles  \nTime allowed: Three hours and fifteen minutes  \nINSTRUCTIONS TO THE CANDIDATE  \n1. Enter all the candidate and examination details as requested on the front ofyour answer booklet.  \n2. You must not start writing your answers in the booklet until instructed to do so by the supervisor.  \n3. Mark allocations are shown in brackets.  \n4. Attempt all 10 questions, beginning your answer to each question on a new page.  \n5. Candidates should show calculations where this is appropriate.  \nGraph paper isNOT required for this paper.  \nATTHE END OF THE EXAMINATION  \nHand in BOTH your answer booklet, with any additional sheets firmly attached, and this question paper.  \nIn addition to this paper you should have available the 2002 edition of the Formulae and Tables and your own electronic calculator from the approved list.  \n1 A general insurer underwrites cover for powerboats.  \nExplain why the insurer may choose to adopt a non-linear earnings pattern for  \npremiums when analysing underwriting performance for this product. [4]  \n2 Under the collective risk model, the total claim amount S payable during a specified period in respect of a block of policies is  \nS = X1 + X2 +   + XN ,  \nwhere Xi is the claim amount payable during the period in respect ofthe i-th claim and Nis the (random) number of claims during the period.  \n(i) State the assumptions of the collective risk model. [1]  \nA general insurance company uses a collective risk model to determine the risk premium for a block of policies. It determines a distribution for Xi and N using the last five years of claims experience and then determines the risk premium using the following expression:  \nRisk premium = E(S) + 2√Var(S) .  \n(ii) Comment on this choice of risk premium. [4][Total 5]  \n3 Describe:  \n(a) two different types of self-retention group, and  \n(b) the reasons for using each type.  \n[6]  \n4 A general insurance company writes crop insurance across the United States of America. One of the perils covered by the policy is loss caused by tornados. The insurance company purchases reinsurance for the tornado peril.  \n(i) Explain why experience rating is unlikely to be used by a reinsurance company in determining the reinsurance premium for this peril. [2]  \nA reinsurance company providing a quote for the reinsurance has a tornado catastrophe model that it has previously used for commercial property business. Thereinsurer intends to adapt this model in order to use it for crop insurance.  \n(ii) Explain the changes that the reinsurance company will need to make to the inventory and vulnerability modules ofthe model. [4]  \n[Total 6]  \n5 The governing body of a developing insurance market has decided to create an industry-wide database. All general insurance companies in the market are required to supply quarterly data on business volumes and claims development at a specified level of granularity and using standardised data definitions. Data must be submitted within one month of each quarter end. All insurers will be able to read all ofthe data in the database.  \nDiscuss the potential benefits of the database to the insurance market and problems that the insurers may experience as a result ofthis initiative. [8]  \n6 A general insurance company writes breakdown cover as an optional extra to the car insurance product that it offers. It has at least five years of detailed claims and exposure data relating to the breakdown cover. The pricing department is undertaking a review of past experience in order to set the risk premium for the following year.  \n(i) Explain, giving examples, what adjustments to the past experience may be required. [6]  \nIn order to boost sales of breakdown cover, the company has started negotiations with a car dealership that sells new and used cars. As an incentive to help car sales, the sales staff can give away this cover t","cbCaiuu4lnfUkKwU","https://ap.wps.com/l/cbCaiuu4lnfUkKwU","pdf",350553,"English","# Instructions to the candidate\n## Examination questions (1-8)\n### Question 1\n### Question 2\n### Question 3\n### Question 4\n### Question 5\n### Question 6\n### Question 7\n### Question 8","[{\"question\":\"What topics does SP8 examine in this 2019 specimen paper?\",\"answer\":\"It assesses general insurance pricing, collective risk modeling, reinsurance pricing approaches, self-retention arrangements, industry database impacts, and premium-setting adjustments for optional and new products.\"},{\"question\":\"How is the collective risk model presented and used in Question 2?\",\"answer\":\"It defines total claim amount S as the sum of individual claim amounts Xi over a random number of claims N, and asks candidates to state model assumptions and comment on a risk premium formula based on E(S) and Var(S).\"},{\"question\":\"What does Question 8 focus on regarding excess of loss reinsurance?\",\"answer\":\"It asks for the features of risk excess of loss reinsurance and then evaluates the choice of exposure measure and the pros/cons of alternative exposure measures for pricing a treaty covering third party liability claims.\"}]","SP8 – General Insurance Pricing Specialist Principles - Specimen Examination - 2019 | PDF",1790492713,15]