Actuarial Outpost SOA Practice Exam #305 (Kaplan-Meier)
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#1
06-06-2018, 11:24 AM
 thirteenthgrave SOA Join Date: Aug 2017 Posts: 19
SOA Practice Exam #305 (Kaplan-Meier)

Hello All, how am I supposed to interpret the numbers on the claim count table?

From the answer key, it seems like you are supposed to take each loss as it is, ignoring whatever the question said about the policy limits:

92/112 + 65/92 + 32/59 where 32 = 14 + 18 and 59 = 92 - 27 - 6

If that is the case, why did it insert 6 losses at \$1500? Indeed, I right-censored 14 + 10 + 6 = 30 losses from the \$500-deductible group. Thus, I had:

92/112 + 65/92 + 17/35 where 17 = losses in the \$750-group and 35 = 92 - 27 - 30

The wording is not clear, if not outright misleading.
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Last edited by thirteenthgrave; 06-06-2018 at 11:30 AM.. Reason: I included the equations.
#2
06-06-2018, 12:22 PM
 Master_of_my_domain Member SOA Join Date: May 2018 College: University of Colorado Posts: 134

Quote:
 Originally Posted by thirteenthgrave From the answer key, it seems like you are supposed to take each loss as it is, ignoring whatever the question said about the policy limits
The problem states that the claim count distribution is independent of any deductible or policy limits. So, I think they state the assumption you are talking about.
#3
06-11-2018, 03:02 PM
 Actua... CAS SOA Join Date: Jun 2018 Posts: 3

Quote:
 Originally Posted by thirteenthgrave Hello All, how am I supposed to interpret the numbers on the claim count table? From the answer key, it seems like you are supposed to take each loss as it is, ignoring whatever the question said about the policy limits: 92/112 + 65/92 + 32/59 where 32 = 14 + 18 and 59 = 92 - 27 - 6 If that is the case, why did it insert 6 losses at \$1500? Indeed, I right-censored 14 + 10 + 6 = 30 losses from the \$500-deductible group. Thus, I had: 92/112 + 65/92 + 17/35 where 17 = losses in the \$750-group and 35 = 92 - 27 - 30 The wording is not clear, if not outright misleading.
You are interpreting the question as if it says:
" ...and policy limits of 1,500 and 20,000, respectively."

But it doesn't say respectively. So either limit can be applied to either of the policies, regardless of the deductible.

So the 14 + 10 that you are including from the \$500 deductible group are actually \$500 deductible with \$20,000 limits; not \$500 deductible policies with \$1,500 limits.

That's why the Question has specific categories for Above \$1,500 and Above \$20,000 in each group.