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Short-Term Actuarial Math Old Exam C Forum

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Old 10-27-2018, 06:53 PM
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SirActSci SirActSci is offline
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Default 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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Old 10-29-2018, 08:27 AM
daaaave daaaave is offline
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Quote:
Originally Posted by SirActSci View Post
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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Old 11-01-2018, 10:05 PM
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Default 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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