Graham
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Here is what I got using the LOGEST function. My calcs matched the table in Werner. I tested it for severity and pure premium also: https://www.battleactsmain.ca/battleacts5.ca/forum5/uploads/505/YTE54ZE85HB6.png
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Meow. I don't want to take a bath!
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I edited the footnote to say simple (non-weighted) average. Thanks for letting me know! 😁
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Yup, thanks! I have corrected it. 😀
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While using rebased relativities before credibility weighting can give similar results, starting with normalized relativities helps address any data issues early on. Your answer still may have received full credit though. In general, credibility wei…
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Good luck on your upcoming exam! You seem well-prepared!
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Yes, this is definitely a difficult topic. You are doing the right thing by going over the solution several times and giving it detailed thought. It's just something that takes time to sink in. Writing your thoughts out in the forum is a good strate…
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Yes, that's generally the case in these type of exam problems. I don't recall any exam problems where loss trends have been separated from LAE trends. If you were doing a stand-alone analysis of LAE then you might dig deeper into LAE trends but that…
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Although it definitely wouldn't be my first choice, I suppose you could think about using a composite rating approach for a diverse workforce under a workers' compensation (WC) policy, but it's a bit out of the ordinary and might not capture the ris…
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You've asked several questions here which go beyond what's required for full credit for this question, and also beyond what would be required on the exam based on the source text. My advice here is if you understand the examiners' report answer to t…
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I don't think that will be true in general because there are a lot of moving parts in the BS-Reported method. The values in the restated reported loss triangle above the diagonal have no consistent relationship the original values since those values…
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Well, yes. In this case, it looks like the house was a total loss so what would probably happen is that the homeowner would take the reimbursement from the insurer and then buy another house for some unspecified amount. Whether the new house costs m…
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Ok, I see. Yes, you're correct. That last row should not be included and the final answer should be 620. (There was a formula in the spreadsheet that didn't get copied to the correct cell.) I will correct the pdf. Thanks for pointing this out.
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I would need to see the original Excel file where this problem came from but I couldn't find it. Where did you get it from?
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Actually, I don't know what the scale on the left axis represents. If it were the natural log of the relativities then the relativities would be e^0.00001, e^0.00002, and so on, but those would be way too close to 1.0000 to be meaningful. Also, none…
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You're welcome. Hopefully it won't come up on your exam. :-)
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If your interpretation is correct then the examiners' report is in error. I guess I don't know for sure, but I would have answered that question the same way as in the examiners' report. The policyholder isn't actually responsible for the full $60. …
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I believe there is an error in the statement of the problem. The unpaid amount cannot be calculated from the given information. I believe the question should have asked for the IBNR amount, not the unpaid amount. (It would be incorrect to make the a…
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That's essentially correct. In the ECR problems, the losses are trended from mid-year to mid-year so the exponents are integers. If we want to estimate 2015, then we need to bring the losses up to the 2015 level. That means AY 2014 is trended 1 year…
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You may be overthinking this... It sounds like there’s a bit of a mix-up here regarding the terms “written premium” and how endorsements are reflected in premiums. The written premium for a full term reflects the total amount that would be charged f…
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The "in-force" quantities are never pro-rated. The in-force premium is a measure of the risk exposure at a specific point in time so it doesn't matter whether the policy is in-force for 1 day or 1 year. If the written premium is $60 and th…
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That is a logical conclusion if we assume that the following are both happening: an increase in average case O/S (due to larger claims remaining open) an increase in paid claims (due to faster processing of smaller claims) You should be a little ca…
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The way I did this problem is to apply the 1,000 first, then the 3,000 policy limit. The 3,000 policy limit refers to the actual amount the insurer pays out. The loss eliminated due to the deductible is: 75,000 + (117 x 1,000) + (3 x 1,000) = 75,000…
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If you were to apply the exposure trend to the exposures then you would need to apply that same trend to the losses so they trend would cancel out. (Unless there is a separate frequency and severity trend applied to the losses, the exposures and los…
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Yes, if the total gross loss goes below 1500 then those transactions (-300 in this case) count towards net reported losses because the insurer becomes responsible for them again and would get credit for the reduction.
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Interesting question. I just checked my BS-Paid spreadsheet and I do round to the nearest integer but I did that mainly because I didn't want hidden decimals in the PDF. But here's my answer to your question: If the counts are large enough, it likel…
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Question 1: When judgement is involved, there is often leeway in the grading. I can't say for sure what will get credit but a good strategy is to provide a short explanation for your choices. If your choices can be justified, you should get credit e…
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The full formula for the complement is: https://www.battleactsmain.ca/battleacts5.ca/forum5/uploads/989/LTIRXZKHJ9U1.png The ratio you referenced in the formula above is required because the implemented rate change is not always the same as the indi…
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@jono123 Yup, thanks. I have corrected it!
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Yes, it would have been nice if the examiners' report had explained more fully why a volatile excess ratio isn't a valid reason. I think a valid explanation for not accepting that reason would include these points: Excess losses are generally always…