Anyone else working on this? I’m working on task 3 right now but would love to be able to discuss with others how this is going.
I am working on this module, but on pause until my exams are over next week.
Side note: I accessed the old/broken/whatever you want to call it old version of AO in order to download the discussions that were had on this module.
@stat.padford Seems like the workaround is no longer working to access the dead AO. Do you have a current solution? Or is it finally gone?
@OldTimer I went and found the thread where this was discussed shortly after I posted the question. Oh well.
So let me revise my question: @stat.padford would you be able to share what you recovered for this module? Thanks!
I am currently working on this module. Have a few questions in each Task, if anyone wants to brainstorm.
For Task 1,
In the second bullet they ask about 2016 run out and how it impacts 2017. Are they saying in 2016 they expected $2.4M in run out? Do they want us to determine if in 2016 the IBNR was over or underestimated to see how we should adjust our 2017 IBNR calculation? @trainheavy @stat.padford @rocketprius92 @OldTimer
Correct where adjustment is in terms of the level of conservatism included.
Thank you @ap123.
Can you assist me with a question on Task 2.
Based off my calculations the proposed plan cost the least, then the prior plan, then the HMO Plus plan.
That being said, when we calculate the premium for the proposed plan, we would expect the claim experience to decrease and the manual premium rate to decrease as well?
Lastly, in Task 2 they mention assumptions for the current plan. But they only speak of prior and proposed. Are the assumptions they are talking about for the prior plan?
Found link to old AO posts
Is it just me or for Task 3, am I seeing significant losses in most years/ overall? I’m trying to play around with the other assumptions but none of it is making a huge difference with respect to bringing the plan up to profits or anything.
In Task 3, I am getting large losses in year 20+.
Does anyone know best practices for the following in Task 3:
What Multiplier is being leveraged? (I cannot find a reference to this in the slides)
Does it make sense to linearly interpolate Incidence, LOS,(% Daily Benefit used) & ($ of Daily Benefit) to calculate Claim Cost?
With the incidence, I’m sticking with not linearly interpolating it but it did make more sense to me given the significant jumps between age bands. My guess is that you can’t go wrong with either for this assignment.
As for the multiplier, I was stuck on that for a bit but now I feel it’s for sensitivity testing purposes. It made no sense to me and was annoying me but then I started working on sensitivity testing and was trying to see where I should input the claims and termination adjustments and then I realized both of those columns had a multiplier above it.
As a reasonability check, the annual premium rate I get is around 980 for Task 3. Is that close to what most people got here?
For task 3, I have a premium close to $850
I MMR’d this a few weeks back. The premium rate should fall in the $1250-$1300 range.
The premium rate can vary a lot depending on how you derive the final lapse rates that you use, I would not say that the premium SHOULD be within such a small range. I think any of the premiums mentioned could work if you developed the lapse rates in a reasonable way and made it clear how you arrived at them in your workbook.
I shouldn’t have used the word ‘should’. Depends on the assumption you’re right. Not sure it would vary that much since you’re supposed to use the study to derive your lapse rates. But fair point.
It looks like the template doesn’t address ages above 90. After taking this into consideration, I get an annual premium of ~$1,250
Thanks! I initially had some of the formulas flowing in wrong (which I didn’t know at the time) and I was seeing negative cash flows starting in year 5. I also had a premium initially closer to $200 and after fixing the formulas, it jumped up significantly and wanted to make sure that was in a “reasonable” range. I’m glad I didn’t just hit submit since my recommendation was “don’t enter the LTC market no matter what” while now there’s different considerations to be made.