CAS Exam 5 Fall 2015, Question 3
Study guide: Exam 5
A personal auto insurer has recently completed the acquisition of a smaller insurer in order to increase their market share in a state.
An actuary has calculated a rate level indication, using only the smaller insurer's historical data for that state.
Part a (0.5 points)
Explain the general role of credibility in ratemaking.
Part b (1 point)
Propose a complement of credibility for the analysis and evaluate it based on three desirable qualities.
Answer this question and see the worked solution