How cautiously was the initial premium set? Again, consider a linked endowment, backed by conventional gilts over the mixed period. Here, I am using the mean figures to produce ratios, which were not calculated for each scenario (I’ll look at that next time).

For MtM {Off}, we guessed that we would need to start with 10,175 {9,082} but we really needed 6,022. Compared to the accurate figure, our initial guesses were 69% {51%} too high. More figures are in the chart.