Preview Questions Actuary | Role Specific Skill

Question 1: When performing reserve forecasting for a general insurance company, what is typically the most critical variable to estimate?

Which action should you take?

Choose only one option

The frequency of claims

The rate of return on the company's assets

The discount rate used for reserve calculation

The ultimate cost of claims

Question 2: When analyzing the persistence of insurance claims, which statistical technique would you use to model the time until a claim reoccurs?

Which action should you take?

Choose only one option

Cox Proportional Hazards Model

All of the above

Kaplan-Meier Estimator

Survival Analysis

Question 3: What is the key advantage of using quantile regression over ordinary least squares (OLS) regression when analyzing financial data?

Which action should you take?

Choose only one option

It allows you to assess the impact of variables on different quantiles of the distribution

It only focuses on the mean of the data

It removes outliers from the data set

It simplifies the interpretation of coefficients

Question 4: How does "Reinsurance Modeling" contribute to financial modeling in insurance, and what factors do you consider when evaluating reinsurance arrangements?

Which action should you take?

Choose only one option

Reinsurance modeling assesses the financial impact of transferring risk to another insurer, considering factors like risk retention, pricing, and coverage limits

Reinsurance modeling focuses solely on pricing and ignores coverage terms

Reinsurance modeling is irrelevant in financial modeling and should be avoided

Reinsurance models are unnecessary as all risks are retained by the insurer

Question 5: What is the role of "Risk Aggregation" in multi-line insurance products, and how do you use data analysis to evaluate combined risk exposure?

Which action should you take?

Choose only one option

Risk aggregation should be avoided as it overcomplicates the analysis

Risk aggregation combines multiple risk exposures to assess the overall portfolio risk, and techniques like correlation and Monte Carlo simulation are used to aggregate risks

Risk aggregation only applies to life insurance and not to property or casualty products

Risk aggregation is irrelevant in diversified portfolios as risks cancel out

Question 6: When using a Monte Carlo simulation to model risk in a portfolio, which distribution is typically used for modeling the claims frequency?

Which action should you take?

Choose only one option

Normal distribution

Log-normal distribution

Exponential distribution

Poisson distribution