Q25
For part b) if the observed LR is still <1 does this not indicate that the policies are non-onerous?
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For part b) if the observed LR is still <1 does this not indicate that the policies are non-onerous?
Comments
Just looking at the loss ratio means you are assuming that a company has no expenses. A loss ratio of 50% could be onerous if your expense ratio is 55%. If you said combined ratio then yes
you assume here EP is 50%.
In reality, if written uniformly... the avg written date is mid 2024. I would've thought 75% is earned in Y1, rest in Y2.
if you draw the line (using a parallelogram), it would be a 75 25 split?
I think the EP for AY 2024 would actually be 50% of the WP in 2023 and 50% of the WP in 2024 that earns in CY 2024. It's just an approximation and 50% seems fair