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Short-Term Actuarial Math Old Exam C Forum

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Old 06-20-2018, 12:58 AM
cashcrazy cashcrazy is offline
Join Date: Nov 2016
College: Waterloo
Posts: 11
Post SOA #53

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Hi, I approached this question using the following formula:
Var[S] = E[X]^2*Var[N] + E[N]*Var[X]
where S = aggregate losses
X = claim amount
N = # of claims.

Is it possible to do this question using the above formula? If so, I'd appreciate any help. Thank you.
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Old 06-20-2018, 01:01 AM
OliverQueen OliverQueen is offline
Join Date: Sep 2013
Posts: 84

That formula doesn't work because # of claims and severity are not indepedent
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