Preview Questions Actuary | Role Specific Skill

Question 1: When considering the impact of inflation on insurance pricing, which method is commonly used to forecast future claims costs?

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Chain-ladder method

Inflation-linked adjustments to claim reserves

Discounted cash flow (DCF) modeling

Claims experience rating

Question 2: Which of the following is most commonly used to model credit risk in actuarial risk modeling?

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Exponential distribution

Poisson distribution

Normal distribution

Credit default models such as the Merton model

Question 3: What is "Liquidity Coverage Ratio" (LCR), and how does it play a role in assessing the liquidity risk of financial institutions?

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LCR focuses solely on long-term solvency and ignores short-term risks

LCR is only necessary for insurance companies, not banks

LCR measures the ability of a financial institution to meet short-term obligations with high-quality liquid assets, which helps manage liquidity risk

LCR is irrelevant as it only applies to central banks

Question 4: When using a Cox Proportional Hazards model for mortality analysis, what assumption is made about hazard ratios?

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They decrease logarithmically over time.

They increase exponentially over time.

They remain constant over time for different groups.

They are random and follow a normal distribution.

Question 5: In Solvency II, what does the Own Risk and Solvency Assessment (ORSA) require an insurer to do?

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Set the solvency ratio target

Prepare the capital management strategy

Calculate the discount rate for technical provisions

Assess and manage risks in the context of its solvency position

Question 6: Which reporting standard under Solvency II requires that insurers disclose their capital requirements and risks?

Which action should you take?

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The Financial Reporting Framework (FRF)

The Regulatory Capital Report (RCR)

The Annual Financial Statement (AFS)

The Solvency and Financial Condition Report (SFCR)