how BCAR capital factors are derived

oxalisoxalis
in BCAR.Cdn

Battle card #13, we have: it's based on the industry factor, and adjusted for the company's volatility in case loss development, I wonder why it's only considering the volatility in loss development? Is it reasonable even for non-reserving risk categories such as business risk, cat risk, premium risk, etc??

Thanks

Comments

  • Staff-T1Staff-T1

    This battle card is referring specifically to reserve capital factors. The source only considers reserve and premium capital factors so there are no business or cat risk factors. For premium factors, this is obtained from industry probability distributions of potential UW profit and loss that may be adjusted for a unit's profitability

  • Staff-T1Staff-T1

    @graham maybe we can clarify in the Battle Cards?

  • grahamgraham

    I've now clarified this. Thx!

Sign In or Register to comment.