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D3 - The Underwriting Profit Provision PDF

9 Pages·2017·English
by  ['A']
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by ['A']| 2017| 9 pages| English

About D3 - The Underwriting Profit Provision

The document discusses various methods for calculating an underwriting profit provision in insurance ratemaking. It begins by providing historical context, noting that a 5% profit was common in the early 20th century but factors like investment income and taxes led to changes. The document then examines different theories of regulation before detailing multiple models for calculating underwriting profit provisions, including calendar year investment offset, present value offset, and internal rate of return on equity flows models. It analyzes the calendar year investment income offset method in particular, outlining how it estimates policyholder-supplied funds to offset the traditional profit provision based on investment income ratios. The document evaluates advantages of the method including using established annual statement figures, but also notes potential distortions with changes in volume

Detailed Information

Author:['A']
Publication Year:2017
Pages:9
Language:English
Format:PDF
Price:FREE
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