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  #51  
Old 08-15-2018, 05:51 PM
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Okay I think I get it, they skipped a step
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  #52  
Old 08-15-2018, 06:13 PM
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Minor nitpick, should I round link ratios to three digits or use six when calculating reserves? I got a near .608 difference in what I calculated in reserves, I'm guessing (hoping) the exam won't have answers close enough to matter
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  #53  
Old 08-15-2018, 08:43 PM
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Okay I think I get it, they skipped a step
The projected total payment is Paid-Through-Current-Year * Link-Ratio, and the reserve is Projected-Total-Payment minus Paid-Through-Current-Year = Paid-Through-Current-Year * Link-Ratio minus Paid-Through-Current-Year = Paid-Through-Current-Year * (Link-Ratio - 1).
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  #54  
Old 08-17-2018, 03:01 PM
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I was working on 17.2 in ASM STAM manual, and I found that the expected value of the limited distribution formula provided on the SOAs exam tables (A.5.1.4) gets me the wrong answer. If I use first principles to solve for what I think the expected value of the limited distribution (assuming k=1), I get that the second term should have an alpha in the numerator - this is consistent with the solution to 17.2.

Is the formula for the expected value of the limited distribution under A.5.1.4 of the exam tables wrong?
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  #55  
Old 08-17-2018, 03:51 PM
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I was working on 17.2 in ASM STAM manual, and I found that the expected value of the limited distribution formula provided on the SOAs exam tables (A.5.1.4) gets me the wrong answer. If I use first principles to solve for what I think the expected value of the limited distribution (assuming k=1), I get that the second term should have an alpha in the numerator - this is consistent with the solution to 17.2.

Is the formula for the expected value of the limited distribution under A.5.1.4 of the exam tables wrong?
No.
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  #56  
Old 08-17-2018, 04:38 PM
Abraham Weishaus Abraham Weishaus is offline
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I was working on 17.2 in ASM STAM manual, and I found that the expected value of the limited distribution formula provided on the SOAs exam tables (A.5.1.4) gets me the wrong answer. If I use first principles to solve for what I think the expected value of the limited distribution (assuming k=1), I get that the second term should have an alpha in the numerator - this is consistent with the solution to 17.2.

Is the formula for the expected value of the limited distribution under A.5.1.4 of the exam tables wrong?
How were you able to use those formulas? E[X^100000]-E[X^10000] is the expected value of the part of any claim that's between 10000 and 100000. That's not what the question is asking for, nor does dividing by Pr(10000<x<100000) get you what the question is asking for either. (In fact it doesn't get you anything meaningful.)
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  #57  
Old 09-10-2018, 09:43 PM
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Question on Exercise 9.1 in the ASM STAM manual.

The answer states that Incurred losses of $45,000 are all in Policy Year 2.
I'm confused why that would be since the loss occurred in Policy Year 1 and it was reported in Policy year 1 as well?

I didn't understand the explanation in the manual.
Thank you!
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  #58  
Old 09-10-2018, 10:28 PM
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Hello, I have a question on Exercise 9.3 from the ASM manual.

The policies are six month policies and the rates are effective for two years. The question is asking for number of years of trend.

Why is the Average accident date for policies sold in the two year period is stated to be 3 months after the midpoint of the two year period.

Can someone explain how this is calculated?

Thank you!
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  #59  
Old 09-10-2018, 11:05 PM
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1) The problem is telling you that rates are effective for 2 years.

The assumption is that the average policy is sold at the midpoint of the two years, therefore sold at the 1 year mark.

2) The next assumption is that the average accident occurs in the middle of the policy period, which in this case is 6/2 = 3 month mark.

Therefore your average accident is at the 1 year and 3 month mark.

You have to take into consideration when the average policy is sold and when the average accident occurs.
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  #60  
Old 09-10-2018, 11:16 PM
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You need to read that problem again. The problem says "A loss on a policy issued on 3/10/CY2 occurs on 12/15/CY2". That accident/ loss is associated with PY2.

[
QUOTE=RockOn;9425123]Question on Exercise 9.1 in the ASM STAM manual.

The answer states that Incurred losses of $45,000 are all in Policy Year 2.
I'm confused why that would be since the loss occurred in Policy Year 1 and it was reported in Policy year 1 as well?

I didn't understand the explanation in the manual.
Thank you![/quote]
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