IFoA SP7 Practice Questions - IFoA SP7 General Insurance Reserving and Capital Modelling Exam - IFoA SP7 Practice Questions - IFoA SP7 General Insurance Reserving and Capital Modelling Exam

Question 1

In the basic chain ladder method, what does a development factor (link ratio) for development period j to j+1 primarily estimate?

The proportionate growth in cumulative claims from one development period to the next The ultimate loss ratio for the most recent accident year The expected number of claims reported in the next calendar year The discount factor applied to future claim payments

Correct Answer:

The proportionate growth in cumulative claims from one development period to the next

Question 2

The Bornhuetter-Ferguson reserve for an accident year is best described as which of the following?

A pure chain ladder projection with no use of any prior expectation A credibility blend that weights the chain ladder estimate by the proportion of claims already developed and the expected (a priori) ultimate by the proportion still to develop The simple average of the paid and incurred chain ladder ultimates The expected ultimate multiplied by the reported claim count

Correct Answer:

A credibility blend that weights the chain ladder estimate by the proportion of claims already developed and the expected (a priori) ultimate by the proportion still to develop

Question 3

An accident year has an expected ultimate of 1,000 and a cumulative development factor to ultimate of 1.25. Using Bornhuetter-Ferguson, what is the IBNR reserve (claims still to emerge)?

250 800 200 1,250

Correct Answer:

200

Question 4

Which condition would MOST undermine the reliability of a basic paid chain ladder projection?

A stable claims handling process over many years Consistent case reserving philosophy across accident years Homogeneous risk groups within the triangle A material change in the speed of claim settlement during the experience period

Correct Answer:

A material change in the speed of claim settlement during the experience period

Question 5

The average cost per claim (ACPC) reserving method separately projects which two quantities?

Claim numbers and average claim amounts Premium rates and expense ratios Discount rates and inflation indices Reinsurance recoveries and gross losses

Correct Answer:

Claim numbers and average claim amounts

Question 1

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Prepare with the IFoA SP7 Practice Questions - IFoA SP7 General Insurance Reserving and Capital Modelling Exam practice quiz. This question bank includes 100 questions covering reserving, risk, solvency, model, and capital. Use it to review important concepts, identify knowledge gaps, and build confidence for the related exam, course, or assessment.

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IFoA SP7 Practice Questions - IFoA SP7 General Insurance Reserving and Capital Modelling Exam

This practice set contains 100 questions from the matching question bank and focuses on reserving, risk, solvency, model, and capital. Work through each question carefully, review the provided solutions, and revisit topics that need more study before your next attempt.

This is an independent study resource intended for practice and review; it is not an official examination or an endorsement by any organization named in the title.

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IFoA SP7 Practice Questions - IFoA SP7 General Insurance Reserving and Capital Modelling Exam

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