III IC-81 case studies
III IC-81 · Put your knowledge to work in context.
IC-81 is a professional examination subject offered within the Insurance Institute of India's professional examination stream, which leads candidates through Licentiate, Associateship and Fellowship stages and sits alongside the Institute's specialised diploma courses. It is aimed at insurance professionals, underwriters, claims handlers and graduates who want a formally examined, industry-recognised qualification rather than a generic online certificate. The III IC-81 case studies are 5 cases and about 4,974 words.
1Motor Own-Damage Rate Indication: On-Level, Trend and the Fixed-Expense Trap
An Indian general insurer's motor own-damage book earned premium of Rs 480 crore in the year just ended, at rates that applied throughout that year. A 6% rate increase filed during the year applied to all policies issued from 1 October; written premium for the year was therefore Rs 500 crore, while the Appointed Actuary computes earned premium at current rate level as Rs 512 crore.
1,018 words, about 5 min2Chain Ladder versus Bornhuetter-Ferguson for an Immature Liability Accident Year
IBNR reserves for a commercial public liability portfolio are being set at 31 March. Cumulative paid claims, in Rs lakh, by accident year and development period from the start of the accident year are: Accident year 12 months 24 months 36 months 48 months --- --- --- --- --- 2021 1,200 1,800 2,050 2,180 2022 1,320 1,980 2,270 - 2023 1,450 2,150 - - 2024 1,600 - - - The selected tail beyond 48 months is 1.03.
962 words, about 5 min3Quota Share or Excess of Loss: Reading a Reinsurance Proposal for the Board
A general insurer writes commercial lines with gross written premium of Rs 800 crore, all earned in the year. The loss ratio is 72% and the expense ratio is 27%, of which 11 points is commission paid to agents and 16 points is other underwriting costs.
1,045 words, about 5 min4Experience Rating an Employer's Liability Risk with One Large Claim
The Appointed Actuary is rating a group employer's liability policy for a textile group. The coming year's exposure is 12,000 employee-years and the current annual premium is Rs 28.8 lakh, i.e.
943 words, about 5 min5Catastrophe PML, Reinstatement and the Limits of a Single Catastrophe Layer
A general insurer's commercial fire portfolio in a city in seismic Zone IV has total insurable value of Rs 12,000 crore across 1,800 risks; the largest single risk is a Rs 450 crore petrochemical plant. The catastrophe model gives the following annual exceedance structure for portfolio damage ratio: 45% probability of no damage; 45% of a 2% damage ratio; 8.5% of an 8% damage ratio; 1% of a 20% damage ratio; and 0.5% of a 45% damage ratio.
1,006 words, about 5 min