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Great question - it's one of those things that's rarely explicitly talked about in any text.
Let's suppose you're doing a territory relativity analysis. You go ahead and calculate the (credibility weighted) indicated relativities and make s…
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We looked this morning and it appears the CAS has taken all of the study kits (not just exam 8) off of their online store already :(
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This is a bit hard to advise on. According to the source texts, the State/Hazard Group Relativity is only mentioned in the Fisher reading in the context of the ICRLL adjustment. So in theory, yes, just in the context of the ICRLL adjustment.
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This is a terminology thing I'm afraid you have to get used to and also hope the CAS uses it in the right context. k is the loss elimination ratio which is a ratio to losses, whereas the excess loss factor is a ratio to standard premium.
S…
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Yes, that's correct. We'll add a clarification to the wiki shortly.
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Thanks, you're correct about the typo in #2, we've fixed the solution to use ln(25) instead of ln(75). You have the correct probability.
For #8a, the intent here is today the actuary has estimated that two years in the future t…
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Yes, this is equivalent to shifting the distribution so the ground up loss now corresponds to the attachment point for the excess layer.
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It should drop to 0 after 18 because the primary insurer cedes any loss over 18m from their perspective. The primary insurer graph should terminate in the same manner as the policyholder's graph. We'll clean up the PDF in time for the next sittin…
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The key here is the terminology - excess claims is referring to the claim severity (size) rather than the aggregate loss. There are claim severities which even after applying inflation are still below the excess attachment point. This dampens the…
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I agree with you, this feels like a poor choice of language in the source. Unscaled deviance is a function of the dispersion parameter so is definitely not independent of the dispersion parameter.
What they're trying to get at is unscaled …
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Thanks for pointing this out. We have a labeling issue - the two ALAE treatment questions are in Clark.CasPerOcc - the PDF has the wrong reading listed. I'll fix this by the next sitting.
The Excel versions of these questions are problems …
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R is the ratio of the modeled claim frequency for the group with at least one accident to the modeled claim frequency for the entire class. Here, the model is claims follow a negative binomial distribution.
It is mentioned in the wiki, star…
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It's possible but probably unlikely in our opinion. In the situation you describe the state/hazard group factor would account for most of the differences between lines of business and then the thin data would introduce more variation in the losse…
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Hi,
Please take a look at the following forum post and let us know if you need more clarification.
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The only way to access the source material referenced in the CAS email on 10/14/22 is to buy the CAS study kit. Copyright prevents us from being able to share our version of the study kit. BattleActs buys the new version each year and summarizes …
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The question says everyone who uses the telematics program gets the 5% discount. However, we don't see anywhere that says poor driving behavior won't be surcharged either via a retrospective premium adjustment or higher premium for the next polic…
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The best explanation I've got at the moment is this is to do with matching the time periods involved. We can project the expected ultimate losses for the prospective policy period. This covers one year. To use the actual loss history we trend and…
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Please could you sketch an outline of the table you're thinking of.
The NCCI experience rating rounds to the nearest integer except for when dealing with interstate risks (rare to be asked) and when calculating the experience mod (two decim…
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Thank you for your suggestion. We are working on producing some original problems on this topic but are unlikely to have them ready for release in time for the Fall 2022 sitting.
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Good catch thanks. The PDF has been updated.
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- Bailey and Simon ask whether the credibility measured depends on how well the risks are segmented by the rating plan to begin with. If the rating plan explains all of the differences we see then dividing the credibility of the class by the a…
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For e part i we want the probability of the aggregate excess of loss treaty attaching. Since this is a 2m xs 6m treaty, it attaches at 6m so we want P(X>6m).
Buried within part d of the question (we hate how densely presented the informa…
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I would say no for two reasons. Firstly, when we look at the standard loss ratios we're concerned with how well the plan corrects for the differences between risks that it has identified. That is, we're interested whether there are directional tr…
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No, our opinion as to how the CAS will likely provide the tables on the exam is unchanged. Our decision is based on:
- The CAS having had this statement in the syllabus in a prior sitting and not honoring it during the exam at the time.<…
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No, our opinion as to how the CAS will likely provide the tables on the exam is unchanged. Our decision is based on:
- The CAS having had this statement in the syllabus in a prior sitting and not honoring it during the exam at the time.<…
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I don't have a great answer for this. The Fisher text doesn't specify a basis for credit risk. I think in the exam you should be told what it's a percentage of and just go with it. If it's not clear then stating you assume it's a percent of stand…
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Yes, the "expected risk class experience" is the ELR for the class multiplied by payroll/100. Your third sentence is correct.
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The coefficient for "EngineSize:small, BodyType:van" is used to determine the discount associated with having BodyType = Van when you have a small engine. This discount is relative to the risks with small engine size and base body type. So the co…
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Thanks for your feedback. We're still evolving as we figure out the best way to provide the information needed to complete these questions.
The tables are straight forward to use. We've included snippets of the tables in most of our files s…
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We're working on a second practice exam but it's unlikely to be ready for this sitting as it's still going through our quality control process. Remember, you have the 2019 exam available as a holdout exam as well.