Exam 5 2006 28c

[Matalino_Ako]

http://www.casact.org/admissions/studytools/exam5/06-5.pdf

In the solution I am wondering how they know right away that the premium earned in Jan - Apr '04 accounts for 5% of the CY 2005 Earned premium. Can someone please explain this to me?

[actuarialista]

http://www.casact.org/admissions/studytools/exam5/06-5.pdf

In the solution I am wondering how they know right away that the premium earned in Jan - Apr '04 accounts for 5% of the CY 2005 Earned premium. Can someone please explain this to me?

Don't think about EP right away--focus on volume of policies written. Then you can figure it out where the 5% comes from, by using what they told you about the volume written in each month.

[Vorian Atreides]

Agree with actuarialista . . . that 5% isn't of EP, but what portion of the book are you looking at.

And the answer as to why it's 5% for each month (Jan - Apr) is practically given to you in part b.