Graham
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I can see the logic behind you suggestion but the CAS has said that there wouldn't be any immediate changes so I think you're ok for the next sitting. The CAS has also not provided any further details regarding changes for the new Excel format. If t…
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question 1 What you're saying sounds right. The key is that all renewals will be in the first half of 2014 and there won't be any in the second half. That means writings will be heavily skewed to the first half of 2014. It will probably take a few y…
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Recall the formula for unpaid ULAE where the IBNR is all pure IBNR or IBNYR: unpaid ULAE = (ULAE ratio) x [ 50% x Case + 100% x IBNR ] and the formula for the ULAE ratio: ULAE ratio = (paid ULAE) / (paid claims) The ULAE ratio is normally calculat…
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A rise in an estimate of ultimate losses and the accuracy of the estimate are different things: If the underlying loss ratio changes, then then estimate of ultimate losses should generally change appropriately, provided the method is responsive to s…
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The Friedland source text states that a 70% quota-share treaty means the primary insurer keeps 70% of the risk, but unfortunately this doesn't appear to be consistent with other sources of information. If you google the definition of quota-share rei…
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I see what you mean about AY 2013, but it would not change the answer. The formula for the final net unpaid is: net unpaid = MAX[ 0, (Ult Claims net of ALL reinsurance) - (net paid) ] So whether you cap the net paid at 5,000 or not, the final unpaid…
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I posted them yesterday! I must have done right after you submitted your comment above!
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question 1 Paid ULAE may rise immediately when premium increases because a company might decide to buy more computers or rent more office space to accommodate the expected increase in costs associated with more policies written and hence more claims…
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I think the sample answer 2 is better and more straightforward because the implied loss ratios can be calculated. You can then directly observe that the loss ratios are decreasing. Note that you're also told that the paid BF method uses the same ECR…
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Ah yes. Sometimes exposures need to be trended and sometimes they don't. This is actually covered in chapter 4 of the pricing material at this link: https://www.battleacts5.ca/wiki5/Werner04.Exposures#Exposure_Trend If exposures do need to be trende…
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Yup, thx! I've corrected it.
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Yes, that's correct. Thank you for pointing out these typos. I have uploaded the edits.
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Typo. I've uploaded an updated version. Thx!
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I appreciate your interest in investigating this further but this line of discussion is outside the bounds of the syllabus. The forum needs to stay focused on topics directly relevant to the exam. My strong advice is return to this investigation at …
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We will take your suggestion under consideration. Thanks.
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Industry data often does not include IBNYR. In any case, this method is not considered an accurate method and is used only if no other method is available.
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Ok, gotcha! I uploaded a corrected version. Thx!
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I just a took a look and I think it's ok, but I admit it's a little confusing because there are 2 estimates of ultimate given in the table. column (3) is an estimate of ultimate based on the paid method column (4) is an estimate of ultimate based o…
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Update for questions 3,4,5: Question 3: This text was leftover from a beta-version of the wiki and has now been deleted. Question 4: The interpretation of the term "one-time change" depends on context. Normally only 1 interpretation makes …
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Update for your questions 1,2: Question 1: I believe exam problem 2017.Fall Q20 on frequency-severity method #2 is an example of what you're asking about. You can see my solution here: https://www.battleacts5.ca/pdf/F-11_(020)_FS_2017_Fall_Q20.pdf T…
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I will look at your questions over the next few days and get back to you. Note: I don't think the additive CL method is discussed in the source text in chapter 7. It's covered in chapter 16 in the context of ALAE. Exam problems sometimes cover mater…
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Hmm...I think I would probably do as follows: (I think you have the right idea. I just need to think through the steps myself.) eliminate 2012 data from consideration use the development method on the remaining data in the "normal way" to …
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Hi Keshav, You're right that using the historical data to calculate the ECR when there has been an operational change doesn't fully make sense. What would be done in such a situation is to first calculate an ECR with historical data, but recognize t…
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Hi Keshav, I added a exponential regression starting at line 47 of the Excel file in the section at the link below. You might need to google "LOGEST" Excel function. It is an array function. You wouldn't be asked to do this on the exam alt…
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I linked to this discussion in the Final Comments box at the bottom of this wiki section: https://www.battleacts5.ca/wiki5/Friedland06.Diagnostics#Changes_in_Settlement_Rate You're correct that in general you can't tell whether average case O/S wil…
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Oh ok, I see. An example where RY aggregation is good because of a change in legal climate is this: Suppose a jurisdiction passes a law on Jan 1 that requires auto insurers to increase medical benefits by 10% on all newly reported claims, regardless…
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The answer in the examiner's report is unclear. It does seem like they are listing the same advantage for both report year and accident year aggregation methods. For the AY aggregation method, they should have specified that this is an advantage onl…