Q. What is the primary purpose of profit testing in insurance pricing?

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Q. What does pricing in insurance entail?

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Q. How is the cost of reserves accounted for in insurance pricing?

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Q. What is the purpose of considering the cost of capital in insurance pricing?

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Q. What is the distinction between physically real cashflow and notional cashflow in insurance pricing?

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Q. How is the establishment of reserves funded in a life insurance company?

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Q. What role does investment income from supervisory reserves play in the profit flow of an insurance company?

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Q. What is a profit criterion in insurance?

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Q. How is the net cash flow stream of a contract defined?

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Q. Which profit criterion is considered the best to use in insurance?

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Q. What is the internal rate of return (IRR) in insurance?

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Q. How is the net present value (NPV) expressed in terms of the premium income of insurance companies?

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Q. What is a limitation of using the internal rate of return (IRR) in insurance?

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Q. What does the discounted payback period represent in insurance decision making?

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Q. How is the discounted payback period typically used in insurance decision making?

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Q. What are some advantages of the cash flow method in insurance pricing?

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Q. What is a limitation of the cash flow method in insurance pricing?

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Q. What are the two known methods of determination of price in insurance?

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Q. Which equation represents the determination of price in insurance using the formula method?

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Q. What is an important consideration in determining the price of insurance?

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