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Dedicated111
01-30-2012, 12:40 PM
Nevermind...I found my answer... long story short, I was trying to understand how to get the end date of trend period 1.

Thanks :)

TheZaha
03-16-2012, 12:14 PM
So...could you share your answer :)

I really can't figure out how given a 2 year period with 6 month policies, the avg data of the last trend point is 11/15. How do you figure out what the last trend point is?

In the text book, Werner and Modlin use quarters, so it makes sense the average data for the last quarter is 11/15. But in the problem we are not given quarters. Any help appreciated!

Vorian Atreides
03-16-2012, 01:04 PM
So...could you share your answer :)

I really can't figure out how given a 2 year period with 6 month policies, the avg data of the last trend point is 11/15. How do you figure out what the last trend point is?

In the text book, Werner and Modlin use quarters, so it makes sense the average data for the last quarter is 11/15. But in the problem we are not given quarters. Any help appreciated!
For the last data point, consider what range of dates are used to calculate that point. The average date of that data would be your trend from date.

TheZaha
03-16-2012, 04:45 PM
That make sense Vorian but from the problem how do you figure out what your range of data is.

The trend-to date for the current trend step is the "average data in your last data point".

This is given in the problem:

• Experience period consists of calendar year premium for 2002 through 2004.
• Current level earned premium for calendar year 2002 is $42,500,000.
• Planned effective date of rate revision is June 1, 2006.
• Anticipate annual rate revisions every 12 months.

How do you know from this what your last data point is? I would have said the data is annual so last point is CY 2004 - midpoint 7/1/04? Perhaps 10/1/04 given 6 month policies/ but 11/15/04?

Vorian Atreides
03-16-2012, 04:49 PM
If the problem is ambiguous, state what assumption you're going to work from.

"I assume that the quarterly points are a rolling-12 average" ==> 12 months worth of data.

"I assume that the quarterly points are just quarterly data" ==> 3 months worth of data.

TheZaha
03-16-2012, 05:54 PM
Ah. Thanks. Sorry still not used to the ambiguous questions yet - always assume I missed something