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oh8849
01-29-2004, 04:53 AM
Hi all,

I cannot understand a notation from Jeffrey T. Lange's paper: The interpretation of Liability Increased Limits Statistics.

In page 165, the notation like 15/30, what does it means? Please you help me out.

TwistedMentat
01-29-2004, 07:27 AM
Hi all,

I cannot understand a notation from Jeffrey T. Lange's paper: The interpretation of Liability Increased Limits Statistics.

In page 165, the notation like 15/30, what does it means? Please you help me out.15 = per person or claimant limitation
30 = per occurrence limitation

ed999
01-29-2004, 06:24 PM
i also found this paper a big confusing to get through. in fact, can someone who has worked long in the industry tell me if his calculation of ILF's is used today? I always thought ILF = E(X^U)/E(X^L).

In fact, I am still not used to this "upper exam" format of studying. each paper is independent of it self and has its own method of "teaching" or lackthereof. When is everything going to sink in????!!!

I am honestly worried that my "success" in passing exams ends here.

Thanks for any response.

TwistedMentat
01-29-2004, 07:01 PM
i also found this paper a big confusing to get through. in fact, can someone who has worked long in the industry tell me if his calculation of ILF's is used today? I always thought ILF = E(X^U)/E(X^L).

In fact, I am still not used to this "upper exam" format of studying. each paper is independent of it self and has its own method of "teaching" or lackthereof. When is everything going to sink in????!!!

I am honestly worried that my "success" in passing exams ends here.

Thanks for any response.As an empirical approach to estimating ILFs, particularly with split limits which are difficult to model, Lange's approach is still in use and useful today.

Sotally Tober
01-30-2004, 10:54 AM
i also found this paper a big confusing to get through. in fact, can someone who has worked long in the industry tell me if his calculation of ILF's is used today? I always thought ILF = E(X^U)/E(X^L).

Absolutely this is still a useful paper to understand.

In fact, I am still not used to this "upper exam" format of studying. each paper is independent of it self and has its own method of "teaching" or lackthereof. When is everything going to sink in????!!!

I am honestly worried that my "success" in passing exams ends here.

Thanks for any response.

You're absolutley right that now it gets tougher. Perhaps the ONLY good thing about the exam structure pre-transition was you could take a smaller exam part and "adjust" to the exam style and how to prepare for it. Not anymore. All in all, Part 5 is a very good, useful exam. It's not so hard (that is not to say it is easy). Just relax. You'll get it.

john koltrane
01-30-2004, 04:37 PM
not sure exactly what your notation E(X^U) etc means but the standard definition is

ILF_k = LAS(k)/LAS(b) where k is the limit you want the ILF for, b is the basic limit, and LAS is "limited average severity", sometimes
also notated as E[X;k] or something similar.

Details on that are in the Klugman Loss Models book.

that's for "pure" ILFs. the math can be extended to deal with
ALAE, ULAE, and risk load. see the miccolis paper on part 9,
or check out an ISO ILF circular.

I've ignored the split limits issue, it's easier to understand all this
at single limits and not worry too much beyond that. There is nowhere
on the syllabus that you would really need to calculate an ILF at 15/30
as opposed to 15/20. (there is some related stuff on part 9, but it is
not a big deal).

hope this helps.