HI
In this question we need to find the BE sales volume.
When calculating the expenses all the renewal commissions & agent financing costs for future policy years are considered and expressed as a % of FYP. i.e we have considered the PV expenses at the start of the policy.
However, it does not take the future premiums in to account, when calculating the BE volume. Does that imply that we need to cover the full value of expenses( intial and renewal commission+ agent financing and Fixed costs) at the start itself?
Thanks
In this question we need to find the BE sales volume.
When calculating the expenses all the renewal commissions & agent financing costs for future policy years are considered and expressed as a % of FYP. i.e we have considered the PV expenses at the start of the policy.
However, it does not take the future premiums in to account, when calculating the BE volume. Does that imply that we need to cover the full value of expenses( intial and renewal commission+ agent financing and Fixed costs) at the start itself?
Thanks
Spring 2013 - Q7 -New agent financing
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