Chapter 1

Question 1

Insurance vs non-insurance advantages and disadvantages:

Answer 1

Tax
-IPF rate
-Tax free rate
-RA

Higher expenses
-regulatory reserves
-training
-regulatory capital

Less flexible
-harder to adjust premium
-withdrawal penalties
-upfront commission and expense loading leads to low PV

Question 2

Why did demutualisation occur

Answer 2

-unable to write profitable NB
-contrained ability to raise capital or acquire other companies

Question 3

why have mergers and acquisitions increased

Answer 3

-higher cost of regulation
-focus on efficiencies and economies of scale
-not meeting capital requirements due to poor performance