CAS 5 "Increased Limits"

[J.T.]

I am going through the problems in the All 10 Manual, and came across one that is confusing me. Forgive me if my question is dumb, but I just started in the P/C side a couple of months ago.

There are 3 methods to review increasing limits (Trend Indiv. Losses, Loss Develop. by Layer, and Fitted Size-of-Loss Distribution). The final part of the question asks:

"Given that the underlying size of loss distribution can be determined, which of the methods above whould produce the highest increased limits factor and which would produce the lowest increasd limits factor? Explain your answer."

Can anyone give me any insight into this?

TIA!

[jerrytuttle]

I don't know the answer, but I suggest you make up a simple loss distribution and experiment.

Assuming the question is accurate, if the hypothesis is true in general, then it must be true in a special case of a simple distribution. I have found this technique useful in a variety of settings.

[jets fan]

From my CSM manual, the answer to this question is:

"If each method is applied correctly, it should not produce biased estimates of the ILFs. Thus each of the methods should produce approximately the same set of factors."

[rsm1978]

They will all produce the same ILF (relatively).

[NO1UNO]

I'm getting paranoid here, what article is this question from? I'm pretty much through the syllabus, and I don't recall running accross this question.

[jets fan]

I'm getting paranoid here, what article is this question from? I'm pretty much through the syllabus, and I don't recall running accross this question.

The question in my CSM references McClenahan. It is from the 1990 Part 6 exam, question #42, part c.

[NO1UNO]

Thanks,

I did answer that question when I went through McClenahan the first time. I just couldn't remember it. As luck would have it, today my study schedule says to review McClenahan.