Appendix 2 Werner - doubts

keshav1996keshav1996
in WernerB.Home


  1. Isn't the trend period for projected fixed exp PP incorrect? In chapter 5 - Premium, the formula for AWD for historical period is given as --> mid-point of historical CY - 0.5*policy term. Since, appendix says that most fixed expenses are incurred when policy is written, so taking AWD instead of AAD makes sense also. Considering that, the second term in the formula hasn't been subtracted while doing the the trend period calculation. Am I interpreting something wrong?
  2. Please confirm whether calculation for proj ult non CAT loss & LAE is correct. I think it's wrong.


Comments

  • GrahamGraham

    Question 1: Trending expenses is different. You can review expense trending here:

    Question 2: Can you be more specific? What do you think is wrong?

  • keshav1996keshav1996

    Q1: I'll see when I study that chapter.

    Q2: Here's snapshot from Appendix 2 (homeowners' example). Please check the calculations on the right vs those in the second last column of the table-->

    Aren't they inconsistent? I think the ones in the column are wrong.

  • GrahamGraham

    Yes, you're correct about the HO example. I have corrected it. Thank you for pointing it out.

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