PDA

View Full Version : Question with indicated rate change/profit provision/trend

Purple Princess
11-03-2006, 02:44 PM
You know that question that gave us a trend and the new and old profit provision (I think they might have been 2% and 5%) then asked us for the indicated rate change?

I can't figure out what article that could have come from. Anyone know?
Avi
11-03-2006, 03:17 PM
You know that question that gave us a trend and the new and old profit provision (I think they might have been 2% and 5%) then asked us for the indicated rate change?

I can't figure out what article that could have come from. Anyone know?

I just solved for P as a function of L both pre and post changes (loss trend and U) and took the ratio as indictated rate change.

\large P = \frac{(1+c)L + FX}{1 - VX - T - U}
tommie frazier
11-03-2006, 03:19 PM
i did what avi said.

P_0 and P_1 calculated. rel incr in premium = (P_1 - P_0)/P_0 - 1
Quack
11-03-2006, 04:04 PM
I would say it's from Robbin. He had a formula for the underwriting profit in the premium. Anyone with basic ratemaking knowledge should be able to do it, though.
jk
11-03-2006, 04:04 PM
That question seemed like it wandered over from Course 5 by mistake.
Avi
11-03-2006, 04:14 PM
That question seemed like it wandered over from Course 5 by mistake.

Maybe, but it still didn't make up for the crazy ones :wall: