Non-life Insurance Actuarial Practice
Non-life practice in the CAA syllabus spans pricing, reserving and portfolio management for Chinese property and casualty insurers, with heavy emphasis on motor business after the 2020 comprehensive reform and on claim-reserve estimation. Expect questions that hand you a development triangle, a loss ratio and an earned premium, then ask for an ultimate loss and an IBNR with the method justified.
Pricing and the motor market
- 交强险 is a nationally uniform, no-profit-no-loss compulsory cover, with premium floating linked to traffic-accident records.
- The 2020 车险综合改革 widened the 自主定价系数 range, cut the 附加费用率 ceiling to 25% and raised the target 预期赔付率 to 75%, shifting the market toward price competition on the pure premium.
- Rating factors split into 从车, 从人 and 从地; frequency is typically modelled with Poisson and severity with Gamma, the pure premium with Tweedie.
Reserving
- 未到期责任准备金: 1/24 or 1/365 methods for annual policies; use daily pro-rata where the inception pattern is uneven.
- 未决赔款准备金: case reserves plus IBNR plus claim-handling expense. Methods are 链梯法, 案均赔款法, Bornhuetter–Ferguson and GLM-based stochastic reserving.
- 综合成本率 = 赔付率 + 费用率; the 综合赔付率 uses incurred claims over earned premium.
Catastrophe and policy lines
- 农业保险 is largely policy-driven with premium subsidies; 巨灾 cover includes the 地震巨灾保险共同体; reinsurance is bought as quota share, surplus or excess of loss.
Worked example
An accident year has paid plus case reserves of 400 at 12 months. Selected age-to-age factors are 1.30 (12→24), 1.10 (24→36) and a tail of 1.02. Chain-ladder ultimate = 400 × 1.30 × 1.10 × 1.02 = 583.4, so IBNR = 183.4. If instead an a priori loss ratio of 70% on earned premium of 900 gives an expected ultimate of 630, and 60% is reported, Bornhuetter–Ferguson gives 400 + 630 × 0.40 = 652, IBNR = 252. Use chain ladder when case reserves are mature and BF when the diagonal is thin or distorted by a catastrophe year.
Traps that cost marks
- Mixing paid and incurred triangles in the same calculation.
- Applying 1/24 where policy inceptions are strongly seasonal.
- Selecting an a priori loss ratio from a catastrophe-affected year.
- Double counting claim-handling expense that is already loaded into case reserves.