Feeling mostly prepared (this will be second attempt) . Few knowledge gaps in Bodoff, Kreps, and Goldfarb that I need to address
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Could you please share specifically what in Goldfarb you need more review of?
Myers Read, reflecting dependencies in aggregate distributions (Iman Conover, copula) , handling different time horizons when aggregating risk sources (Multi period dfa models)
Anyone know where we can go to see the PearsonVUE sample questions?
Why/when would an Industry Loss Warranty be considered over an indemnity CAT bond?
Since payments are driven by industry (not company) loss projections, an investor might prefer it because it will settle faster and avoids moral hazard.
On the insurer side, though, you are exposing yourself to increased basis risk. Are there any other reasons to prefer an ILW?
Some background on the Mango variance formula:
An event has a probability of occurrence of p. This is basically a Bernoulli distribution except that instead the value of the random variable X being 1 or 0 (occurring or not occurring), the value of the random variable is Loss or 0.
The variance of a Bernoulli distribution is:
Var(X) = p * (1 - p)
The variance for this distribution is:
Var(Loss * X) = Loss^2 * p * (1 - p)
Since all the events are assumed to be independent, the variance of the total Loss (Y = X_1 + X_2 + âŚ) is simply the sum of the variances.
Var(Y) = Var(X_1) + Var(X_2) + âŚ
Var(Total Loss) = Sum ( Loss_i^2 * p_i * (1 - p_i) )
This formula works when weâre summing the variance of independent events that are each independent random variables. Itâs similar to a binomial distribution except that each event (trial) has a potential loss amount and the probabilities vary by event.
It will give the same answer as the traditional variance formula, except that the traditional variance formula requires you to calculate the whole joint probability set of all the event combination possibilities.
Itâs a good question. One benefit the paper mentions is that an ILW is treated by regulators as reinsurance for accounting purposes. I was curious myself, so I found the cited paper (McDonnel 2002). It lists out the following advantages for the insurer (buyer of an ILW).
Of course you donât need to know these, but the idea that theyâre easier to structure/understand, donât require underwriting info from the insurer, and possibly more price competitive seem to be good advantages.
Motivations to participate in the ILW market
Motivations for buying these are listed below.
- Contracts are easy to understand.
- They are easy to structure.
- Minimal retention - coverage can drop down to pick up loss excess of retentions as low as US$10,000.
- Other coverage purchased by the buyer inures to the sole benefit of the buyer.
- No underwriting information is required as the seller is underwriting the industry loss and not the buyerâs portfolio.
- Pricing may be more competitive than the pricing for traditional coverage. This is owing to the relatively lower level of uncertainty on industry losses compared to the uncertainty that there may be for a specific portfolio.
- Reinsurers may not give a buyer the credit for changes made to his/her portfolio. A client may feel that the industry loss on which to attach a specific layer may be much higher than the level that a reinsurer considers necessary to attach a layer. Using an ILW focuses the decision on pricing at an agreed attachment point.
- ILWs provide broad coverage. They may include protection for reinstatement costs, lost profit commissions, no claim bonuses and index-linked securities.
- Finally, they can fill shortfalls in traditional programmes.
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Took the test yesterday. Always a weird feeling the day after, never know what to do with myselfâŚguess just sip coffee and get to work? Maybe Iâll take a long lunchâŚ
Please share your experience without violating the NDA.
Thanks.
I took the exam yesterday and thought it was tough, but probably fair. A lot of questions asked in different ways to prior exams.
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First time taking it? Itâs my first time but Iâd like to ask if you thought it was harder than the last sitting which was a tough sitting.
How would you compared to 2018 and 2019?
Thanks Dude.
This was my first time taking it as well so I canât compare it to last sitting. Probably slightly more difficult than 2018/19. Questions just felt like they were asked in slightly different ways than I was used to.
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Every Fellowship exam sitting I go in feeling 150% more prepared than any Associate level exam I have ever taken, and they still find ways to write such ambiguous and garbage problems it amazes me.
The volume of the syllabus means there could be 100 versions of reasonable exams but they find a way to stick us in a round room and ask you to find the corner.
The lack of transparency anymore is a disgrace,
Overall itâs no different than any version of 7 or 8 Iâve taken over the years so I feel I could score a 3 to an 7 and not be surprised.
To those who volunteered to write questions this year, do us all a favor and donât do it again. Find something better to do then screw with peopleâs lives.
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Yeah, I agree with the this. I thought with the unusually low pass rate last sitting + the fact that the exam is changing next year they might throw us a bone this sitting instead of the usual.
Damn it was that bad?
Dropping my nickels hereâŚ
I have tried exam 9 since COVID hit and this very sitting was my 4th try.
I prepared first 3 settings with CF/RF. This sitting, I added CCE for my sidecar.
Having said this, I was roasted by 3 practice exams by CCE, thinking I am hitting the new low.
Yet, in terms of this very exam 9 in May 2023,
I found that I was able to at least write something to all parts of question.
Yes, I found the CCE practice exams really helped me to be okay with this exam.
Now the ranting part with ever since transition to Computer-based-testing.
Now that CAS exam has the Excel capability,
they unleashed whole array of âif you donât know the formula calculating the cell with only mouse or only going to use handheld calculator, maybe this exam is not for youâ questions.
I am baffled by how I would have done this exam (including exam 5,7,8) if the exams were to be offered back to âpaper-basisâ.
TI-30XS wonât save any of my life.
During the exam, I found myself the only person in the Pearson center fervently typing the keyboard.
All those curve ball questions where CAS wants to trick us by weird or unusual wordings/settings, please donât do it to this to 20Qs/4Hr exam = 1Q/20min.
If we have simple computation question with multiple choice answers, I would be totally be fine with curveball wordings.
For those unusual, ânon-traditionalâ questions, if CAS really wants us to be tested on application and âcreativityâ on how to apply the knowledge, then offer exam 9 as if on âmodule project basisâ the SOA style exam under ACAS/FCAS supervision.
Under 4 hour exam, in almost all exams written, The exam length suggests that you have to know and are ready to solve every question right off from the start in order to successfully complete your answers.
If the length is right, it should be that you have to carefully think, elaborate your answers, then will remind yourself leaving the test center âoh, this question was asking these kinds of stuff. Nice question!â.
Unfortunately, in all 4 exam 9 sittings, If I see these kind of âWhat theâŚ?â questions especially in the earlier questions out of 20ish questions, I started to freak out and having the feeling of âlet me try after I at least try all other questionâ did not help either when you see the second WTH questions.
I sincerely hope that I could pass this time and not look back, but also I hope that the exam contents in exam 9 to be improved so that the candidates can walk out the testing center at least feeling that âthe exam was pretty challenging but I gave a good fightâ
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It was challenging, in my humble opinion. When do you sit?
Monday. Been studying like hell but im def nervous based on what ive been hearingâŚ
Good luck - report back (of course in the most generic non-descriptive way possible lol)