October 2018 Exam STAM Thread

[RockOn]

Originally Posted by Ginerv30

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.

That makes total sense - Thank you for that clear explanation!

[RockOn]

Originally Posted by Ginerv30

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]

Hi Ginerv,
I'm not sure that agree with you. If a policy is issued on 3/10/CY2 and has a loss 9 months and 5 days later, then it's still in is first policy year. I'm clearly missing something but not sure what.
Thank you.

[Ginerv30]

Hi RockOn,

For PY1, the policy would have to have been issued any date between 1/1/CY1 and 12/31/CY1.

The problem tells us that the policy was issued on 3/1/CY2, therefore it is associated with PY2.

[A Pimp Named Slickback]

Working on the SOA326

I'm looking at the solution for 23 and I don't understand the expected counts for the three intervals are 15(2/theta) if we set theta>5. Specifically I don't know why there's a 2 in this.

[RockOn]

Originally Posted by Ginerv30

Hi RockOn,

For PY1, the policy would have to have been issued any date between 1/1/CY1 and 12/31/CY1.

The problem tells us that the policy was issued on 3/1/CY2, therefore it is associated with PY2.

I think my definition of policy year is different...

[SweepingRocks]

Originally Posted by A Pimp Named Slickback

Working on the SOA326

I'm looking at the solution for 23 and I don't understand the expected counts for the three intervals are 15(2/theta) if we set theta>5. Specifically I don't know why there's a 2 in this.

The part where it's 15*(2/Theta)=30/Theta Is just for the first interval. The first interval runs between 0 and 2. So for the first interval, the probability of the loss falling between 0 and 2 is 2/theta because the distribution is uniform. So we multiply the probability times the total exposures (5+5+5=15) to get 30/theta.

The probabilities for the next two intervals are 3/theta and 1-(5/theta) respectively. They are not all 2/theta.

In short, 2/theta is the probability

[SweepingRocks]

Is this thread quiet because you're all understanding the material? I'm struggling on some small things, but I think I'm feeling good about taking STAM on the 8th

[ActuariallyDecentAtBest]

Originally Posted by SweepingRocks

Is this thread quiet because you're all understanding the material? I'm struggling on some small things, but I think I'm feeling good about taking STAM on the 8th

Same. I'm almost done with the material but I do like the feeling of cohesion between a good amount of the topics (except for general insurance stuff. Feels like a misc. compared to the rest of the material.) Taking MLC first and then this makes me feel so much better.

[Abraham Weishaus]

Originally Posted by RockOn

I think my definition of policy year is different...

Stick with the definition in the textbook: Any loss on a policy issued in calendar year x is associated with policy year x, even if it occurs after calendar year x (up to 3/10/CY3 in this example).

[KD24]

How is everyone's studying coming along? What source are you using (CA, TIA, Mahler, SOA 326, etc)? What's everyone's EL in ADAPT so far? The nerves are kicking in for me.