View Full Version : Exam5: Individual risk rating
03-22-2004, 08:57 AM
Individual risk rating, Page173, Table 4.6:
Can anyone tell me how the total of Column(6):277,000 is calculated? I believe the other entries of column(6) are calculated by using this total and distributing based on column(2).
But how the total of 277,000 is found? or is given?
Many thanks for your time
03-22-2004, 12:31 PM
I find that it is a given. At the bottom of pg 174, it says that there is a built in minimum premium - the administrative expense. This is then allocated according to expected # of exposures.
I put together an exhibit to explain the two examples (Workers Comp & ISO) in the experience rating section. Tonight, I'll post them on the web.
Is there a way to post a word doc on this site? If not, I'll post elsewhere, and provide the link.
03-23-2004, 02:33 AM
Ok, here's the link.
I was having such a hard time getting the big picture of this article, so I made a real simple outline - that's the first page.
The rest is devoted to the two experience rating exhibits. You'll need the Sherwod paper handy to follow this addendum.
Let me know if you have any questions.
This is a link to an addendum to Sherwood's paper "Individual Risk Rating" (http://www.ugcs.caltech.edu/~ortega/Individual_Risk_Rating.doc)
did any one of you find the individual rating is such a hard one. :cry: It cost me such a long time to read through it and understand it. especially the ISO experience rating plan. The several-time conversion confused me totally.
and 277,000 is the estimated discounted admin cost equals 1109,000 subtract 832,000-the 98-99 discounted expected losses
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