CAS Exam 5 Spring 2015, Question 14
Study guide: Exam 5
Given the following reported claims data:
| Size of Loss | Reported Claim Counts | Reported Ground-Up Losses |
|---|---|---|
| X <= $1,000 | 120 | $75,000 |
1,000 < X <= 4,000 |
117 | $209,000 |
| $4,000 < X | 3 | $22,000 |
Individual claims above 4,000 are: 5,500, 6,500, and 10,000.
Part a (0.75 points)
Calculate the increased limits factor for an increased limit of 6,000 and a basic limit of 4,000.
Part b (0.75 points)
Calculate the combined loss elimination ratio for a policy with a 1,000 deductible and a policy limit of 3,000.
Part c (1 point)
Briefly discuss two potential issues when using historical data from policies with deductibles or limits to price deductible factors. Propose a solution for each issue.
Answer this question and see the worked solution