CAS Exam 5 Spring 2017, Question 24

Study guide: Exam 5

For each of the following insurers, briefly describe why the classical technique is not optimal and briefly discuss an alternative technique that addresses the problem identified.

• There is no inflation.

Part a (0.5 points)

An auto insurer expanding its operations by writing policies in two new states.

Part b (0.5 points)

A homeowners insurer located in a hurricane prone area.

Part c (0.5 points)

An insurer writing a long-tail line of business.

Answer this question and see the worked solution

Concepts tested

• Unallocated Loss Adjustment Expenses ULAE
• Loss Reserving
• Long Tail Lines
• Catastrophe Loss

More questions from this set

• CAS Exam 5 Spring 2017, Question 23
• CAS Exam 5 Spring 2017, Question 25