CS2 Practice Questions: Original Questions with Hints

CS2 practice questions

Original questions in the style of both papers, sorted by syllabus area, each with hints, a worked solution and a marking schedule.

Paper A	3 hours 20 minutes, a theory paper answered in Word
Paper B	1 hour 50 minutes, questions answered in R, results presented in Word

Paper A

3 hours 20 minutes, a theory paper answered in Word

Paper B

1 hour 50 minutes, questions answered in R, results presented in Word

Past papers

Past papers and examiners' reports moved to the members' learning site on 15 October 2025. The questions here are original and add to them rather than copy them.

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Pareto claims under excess of loss

Paper A style · Losses and reinsurance · Straightforward · 8 marks

Individual claim amounts on a household contents portfolio follow a Pareto distribution with parameters $\alpha=4$ and $\lambda=2{,}400$ , so that $F(x)=1-\left(\frac{2400}{2400+x}\right)^{4}$ for $x$ $>0$ . The insurer has an individual excess of loss reinsurance treaty with retention £2,000.

(i)
Calculate the probability that a claim involves the reinsurer, to 4 significant figures.
1 mark
Your answer
(ii)
Calculate the insurer's expected payment per claim, to the nearest penny.
3 marks
Your answer
(iii)
Calculate the reinsurer's expected payment on a claim that involves the reinsurer, to the nearest penny.
2 marks
Your answer
(iv)
Hence calculate the reinsurer's expected payment per claim (including claims that do not involve it), to the nearest penny, and check your answers against the mean claim amount.
2 marks
Your answer

Questions people ask

Do I need statistical tables?

Paper A questions here give every value they need. In Paper B questions you use R for probabilities, quantiles and model fits, as in the exam.

CS2 practice questions

Past papers

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Pareto claims under excess of loss

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