1
Q
Salaries and Salary related expenses.
A
a) Directly allocate salaries, for Staff whose work fall entirely within cell to that cell.
b) Use timesheets to split salaries between cells, for staff whose work falls in more than one cell.
c) For other staff split between direct and overheads. Then split direct portion (into each cell) in proportion to overall split of staff a and b
2
Q
Property Cost
A
- Charge actual rent/notional rent to relevant dpt.
- Split this by floor space occupied by department s.
- Allocate department costs between cells in same proportion as salaries
3
Q
Computer costs
A
- Amortise the cost of purchasing the computer over its useful life.
- Add it to ongoing computer costs.
- Allocate in accordance to computer usage.
4
Q
Investment Costs
A
Reduce investment return by investment expenses.
5
Q
One of costs
A
- Amortise large one of cost over useful life, and treat as overhead.
- If treated as asset, then do a charge e.g notional rent.
- Exclude exceptional items from analysis.
6
Q
Claims handling costs
A
Allocate direct claims handling expenses to specific product line.
-All other indirect can be apportioned according to number or amount of claims arising from each product.
7
Q
Adjustments to base data
A
The base data would be adjusted to allow for:
- unusual features in the base period data
- large or exceptional claims
- trends and inflation
- changes in the risk and/or cover (eg mix, cover, underwriting or reinsurance)
- environmental changes
