CAS Exam 5 Fall 2013, Question 11
Study guide: Exam 5
Given the following information:
| Size of Loss | $100,000 Limit Claims | $100,000 Limit Losses | $250,000 Limit Claims | $250,000 Limit Losses | $500,000 Limit Claims | $500,000 Limit Losses |
|---|---|---|---|---|---|---|
X \leq \$100{,}000 |
100 | $8,000,000 | 35 | $1,800,000 | 35 | $1,800,000 |
\$100{,}000 < X \leq \$250{,}000 |
40 | $7,400,000 | 25 | $3,900,000 | ||
\$250{,}000 < X \leq \$500{,}000 |
15 | $5,200,000 |
| Limit | Indicated Factor (pure premium generalized linear model analysis) |
|---|---|
| $100,000 | 1.00 |
| $250,000 | 0.95 |
| $500,000 | 1.15 |
For the $250,000 policy limit:
Part a (1.25 points)
Calculate the indicated increased limits factor, assuming a basic limit of $100,000.
Part b (0.5 points)
Explain the difference between the indicated increased limits factor calculated in part a. above and the generalized linear model results.
Part c (0.5 points)
Select an increased limits factor and briefly explain the rationale for the selection.
Answer this question and see the worked solution