Actuarial Notes

Exam GI-101

GI 101 – Ratemaking and Reserving is an exam of the Society of Actuaries' Fellowship (FSA) pathway. Its syllabus covers the Nov 2026/Mar 2027/Jul 2027 sittings.

Learning Objectives

Introduction and Key Considerations (0–6%) The candidate will understand the key considerations for and key concepts underlying general insurance actuarial work.

  1. Identify sources of professionalism requirements and good practice
  2. Demonstrate knowledge of good practice related to actuarial work
  3. Use the actuarial control cycle to frame actuarial work
  4. Understand the components of ultimate values
  5. Explain how estimates of ultimate values are used
  6. Demonstrate the importance of understanding key terminology and interrelationships
  7. Identify different types of data used for actuarial work
  8. Explain the responsibilities of the actuary related to data
  9. Describe how and why data are segregated and aggregated
  10. Describe qualitative information required for actuarial work
  11. Understand the sources of data and information for actuarial work
  12. Understand credibility as used for actuarial work
  13. Explain the application of trend adjustments in actuarial work
  14. Illustrate the types of trend that influence the future cost of claims, expenses, and premiums
  15. Identify the actuary’s responsibilities with regards to documentation for actuarial work
  16. Describe the role of professional judgment in actuarial work

Readings:

  • Fundamentals of General Insurance Actuarial Analysis, J. Friedland, 2nd Edition, 2022 (1a-p)
    • Chapter 2
    • Part 2: Key Concepts (excluding Chapter 10)
  • Actuarial Standards of Practice, Actuarial Standards Board of the American Academy of Actuaries, No. 25, Credibility Procedures, 2013 (1l)

Preparing Claims and Exposure Data for Actuarial Work (8–18%) The candidate will demonstrate the ability to prepare claims and exposure data for general insurance actuarial work.

  1. Create development triangles of claims and counts from detailed claim transaction data
  2. Describe the different types of exposures used for conducting actuarial work
  3. Calculate written, earned, in-force and unearned premiums for portfolios of policies with various policy terms and earnings patterns
  4. Adjust historical earned premiums to current rate levels
  5. Understand types of changes influencing average premium levels
  6. Describe adjustments needed to estimate ultimate premiums

Readings:

  • Fundamentals of General Insurance Actuarial Analysis, J. Friedland, 2nd Edition, 2022 (2a-f)
    • Part 3: Preparing the Data (excluding 12.6.4 and 12.6.6)
    • Appendices A through C and F (excluding Sections A.3.6, A.5)

Projecting Ultimate Claims (42–56%) The candidate will know how to calculate and evaluate projected ultimate values.

  1. Identify considerations for selecting methods for estimating ultimate claims
  2. Identify and describe good practice related to projecting ultimate claims with regard to required data, large claims, and comparison of current to prior actuarial work
  3. Identify the types of development triangles that can be used for investigative testing
  4. Analyze development triangles for investigative testing
  5. Describe the key assumptions underlying the following projection methods: development method, development-based frequency-severity method, expected method, Bornhuetter Ferguson method, Benktander method, Cape Cod method, and Generalized Cape Cod method
  6. Demonstrate knowledge of good practice related to projecting ultimate values
  7. Estimate ultimate values using the methods cited in (e)
  8. Describe the Berquist-Sherman data adjustments and their key assumptions
  9. Adjust data triangles for changes in the adequacy of case estimates or changes in the rate of claim settlement using a Berquist-Sherman data adjustment
  10. Estimate ultimate claims using the appropriate Berquist-Sherman data adjustments
  11. Explain the effect of changing conditions on the projection methods cited in (e)
  12. Assess the appropriateness of the projection methods cited in (e) in varying circumstances
  13. Evaluate and justify selections of ultimate values based on the methods cited in (e)

Readings:

  • Fundamentals of General Insurance Actuarial Analysis, J. Friedland, 2nd Edition, 2022 (3a-m)
    • Part 4: Basic Methods for Estimating Ultimate Claims (excluding 15.8, 16.6, 16.7, 17.8, 18.8, 19.6, 20.6, 21.3.5, and 21.3.6)
    • Appendices A through C and F (excluding A.3.6 and A.5)

Financial Reporting (4–12%) The candidate will understand financial reporting of claim liabilities with respect to unpaid unallocated loss adjustment expenses.

  1. Describe the key assumptions underlying ratio and count-based methods for estimating unpaid unallocated loss adjustment expenses
  2. Estimate unpaid unallocated loss adjustment expenses using ratio and count-based methods
  3. Evaluate and justify selections of unpaid unallocated loss adjustment expenses based on ratio and count-based methods

Readings:

  • Fundamentals of General Insurance Actuarial Analysis, J. Friedland, 2nd Edition, 2022 (4a-c)
    • Chapter 23 (excluding section 23.4)

Trending (6–16%) The candidate will understand trending procedures as applied to ultimate claims, exposures and premiums.

  1. Identify and describe the influences of portfolio changes on claim frequency and severity
  2. Identify the time periods associated with trending procedures
  3. Analyze and evaluate trend for claims (including frequency, severity, and pure premium) and exposures (including inflation-sensitive exposures and premiums)
  4. Choose trend rates for claims (frequency, severity, and pure premium) and exposures
  5. Calculate trend factors for claims and exposures

Readings:

  • Fundamentals of General Insurance Actuarial Analysis, J. Friedland, 2nd Edition, 2022 (5a-e)
    • Part 6: Trending Procedures
    • Appendices A through C, and F (excluding A.3.6, A.5)

Ratemaking (10–22%) The candidate will understand how to apply the fundamental ratemaking techniques of general insurance.

  1. Quantify different types of expenses required for ratemaking including expense trending procedures
  2. Incorporate underwriting profit and contingency margins in ratemaking
  3. Explain the requirements for loadings for catastrophes and large claims in ratemaking
  4. Calculate loadings for catastrophes and large claims
  5. Apply loadings for catastrophes and large claims in ratemaking
  6. Describe the claim ratio and pure premium methods of ratemaking
  7. Calculate indicated rates and rate changes using the claim ratio and pure premium methods
  8. Demonstrate the use of credibility in ratemaking

Readings:

  • Fundamentals of General Insurance Actuarial Analysis, J. Friedland, 2nd Edition, 2022 (6a-h)
    • Part 7: Ratemaking (Chapters 30 through 32)
    • Appendices A through C, and F (excluding A.3.6, A.5)

Analyze and Evaluate Real-Life Scenarios (Included in Topics 2, 3, 5 & 6) (0%) The candidate will be able to define an approach for actuarial analyses supporting financial reporting and ratemaking analyses under various real-life scenarios. The candidates will be able to define funding requirements for self-insurers.

  1. Identify data and information requirements
  2. Conduct investigative testing
  3. Choose projection methods to estimate ultimate values
  4. Estimate ultimate values
  5. Justify selections of ultimate values
  6. Develop reserves for financial reporting

Readings:

  • Fundamentals of General Insurance Actuarial Analysis, J. Friedland, 2nd Edition, 2022 (7a-f)
    • Appendices A through C, and F (excluding A.3.6, A.5)

Source Material

Source Material

  • Fundamentals of General Insurance Actuarial Analysis, J. Friedland, 2nd Edition, 2022
    • Chapter 2 (1a-p)
    • Part 2: Key Concepts (excluding Chapter 10) (1a-p)
    • Part 3: Preparing the Data (excluding 12.6.4 and 12.6.6) (2a-f)
    • Appendices A through C and F (excluding Sections A.3.6, A.5) (2a-f)
    • Part 4: Basic Methods for Estimating Ultimate Claims (excluding 15.8, 16.6, 16.7, 17.8, 18.8, 19.6, 20.6, 21.3.5, and 21.3.6) (3a-m)
    • Appendices A through C and F (excluding A.3.6 and A.5) (3a-m)
    • Chapter 23 (excluding section 23.4) (4a-c)
    • Part 6: Trending Procedures (5a-e)
    • Appendices A through C, and F (excluding A.3.6, A.5) (5a-e)
    • Part 7: Ratemaking (Chapters 30 through 32) (6a-h)
    • Appendices A through C, and F (excluding A.3.6, A.5) (6a-h)
    • Appendices A through C, and F (excluding A.3.6, A.5) (7a-f)
  • Actuarial Standards of Practice, Actuarial Standards Board of the American Academy of Actuaries, No. 25, Credibility Procedures, 2013
    • Outcomes 1l