View Full Version : WM Ch 4 Question on Exposures
12-20-2010, 02:13 AM
Can somebody explain this equation on pg 57 of latest WM copy.
CY Unearned Exposures = CY Written Exposures - CY Earned Exposures + Unearned Exposures as of the beginning of the CY.
12-20-2010, 09:06 AM
Just like premium,
Earned = written + Unearned LY - Unearned TY
Last year's unearned (unearned at beginning of CY) are added, because you've earned them now. This year's unearned are subtracted because you haven't earned them yet.
Simple algebra gets you to the WM equation.
12-20-2010, 09:59 AM
Another way to look at the problem (which can also be applied to both earned and unearned):
How much exposure is present during the calendar year?
LY Unearned + TY Written
Now, back out what was earned (or unearned):
(LY Unearned + TY Written) -- Earned Expos @ YE of TY = Unearned @ YE TY
(LY Unearned + TY Written) -- Unearned Expos @ YE of TY = Earned @ YE TY]
12-20-2010, 01:37 PM
Got it, thanks guys.
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