IEE: Calculation of TIA & FAIT
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Calculate TIA (Total Investable Assets) & FAIT (Funds Attributable to Insurance Transactions)
| all lines |
notation |
prior CY |
current CY |
| policyholders' surplus |
S |
|
|
| net loss & LAE reserve |
L + LAE |
|
|
| net UEP reserve |
UEP |
|
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| net EP |
NEP |
|
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| ceded reinsurance premiums payable |
re |
|
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| agents' balances |
AB |
|
|
| PrePaid Expense Ratio (PPER) |
|
TIA
= m(L) + m(LAE) + m(UEP) + m(re) – m(AB) + m(S)
FAIT
= m(L) + m(LAE) + m(UEP) + m(re) – m(AB) – (PPE for UEP)
Note
When the formulas are written next to each other, the difference between them is obvious!
(PPE for UEP)
= PPER x m(UEP)
PPER
= (net acquisition expense) / NWP
Solution:
| TIA (Total Investable Assets) |
|
| FAIT (Funds Attributable to Insurance Transactions) |
|
