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#1
10-27-2018, 06:53 PM
 SirActSci Member CAS SOA Non-Actuary Join Date: Dec 2015 Posts: 97
TIA Semi-Parametric Credibility: Non-Poisson Case

In exercise 1:

Should “number of claims” in the second paragraph be the amount of claim to be consistent with the other references in the question and the 2013 experience of \$200 which is a claim amount.

Also, if we are observing amount of claim (being the dollar amount), should the exposure be number of claims and not number of insureds.

If number of claims was intended and \$200 shouldn’t be the 2013 experience but 200 claims. The question would be consistent. Is this true?
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Last edited by SirActSci; 10-28-2018 at 07:40 PM..
#2
10-29-2018, 08:27 AM
 daaaave David Revelle Join Date: Feb 2006 Posts: 3,048

Quote:
 Originally Posted by SirActSci In exercise 1: Should “number of claims” in the second paragraph be the amount of claim to be consistent with the other references in the question and the 2013 experience of \$200 which is a claim amount.
Yes, it should. Thanks for pointing this out, I'll update the lesson.

Quote:
 Also, if we are observing amount of claim (being the dollar amount), should the exposure be number of claims and not number of insureds. If number of claims was intended and \$200 shouldn’t be the 2013 experience but 200 claims. The question would be consistent. Is this true?
The question is asking about annual claim amounts. One data point is thus one annual claim amount for 1 insured, and the number of exposures is the number of insureds for our 1 year. We have no idea how many claims were made, just that we have 50 annual claim totals.
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#3
11-01-2018, 10:05 PM
 SirActSci Member CAS SOA Non-Actuary Join Date: Dec 2015 Posts: 97
Introduction to Rate Making

Hello Dave,

In the intro to ratemaking video (E.2.1) the example in the first part of the video says that since the permissible loss ratio is less than expected we would want to increase the avg gross premium. However, in the second exercise demonstrating the lost cost method, it is also said that the PLR (0.65) is greater than ELR (0.625) so we increased the rate. This seems like a contradiction. Kindly provide some clarity as to why the two aproaches are different.
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