Question: Question 6 - Learning Outcome 5 (10 marks) BD plc, an experienced insurer with significant property and liability accounts, is facing uncertainty about the future

Question 6 - Learning Outcome 5 (10 marks) BD plc, an experienced insurer with significant property and liability accounts, is facing uncertainty about the future cost of claims in its insurance portfolio. Approximately two years ago, BD plc widened its risk appetite and commenced underwriting cyber liability insurance. Separately BD plc has identified that climate change is having a significant impact on claims frequencies, in several countries in which it operates. a) Explain, with justification, the difficulty for BD plc in estimating the cost of cyber liability claims for its newer portfolio. (5 marks) b) Explain, with justification, the difficulty for BD plc in estimating the frequencies of climate change related claims.

Outline the main characteristics of insurance company accounts.

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