View Full Version : 2009 #10-Reserving
01-18-2011, 08:54 PM
For the Cape Cod method in the sample answer- Why do we calculate one "Expected Loss Rate" For all the years. Shouldn't the more correct way be to calculate expected loss rate's for each individual year?
01-18-2011, 11:01 PM
The Cape Cod Method starts with the single ELR and then adjusts it to each individual year.
You get an equivalent answer if you use on-level premium (instead of recorded premium).
On the Exam, take the path of least resistance and spend the "extra" time tackling another problem.
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