CAS Exam 5 Fall 2017, Question 11

Study guide: Exam 5

The output of a generalized linear model (GLM) analysis on relativities for pure premium by territory is shown below:

• Chi-Square Percentage (entire variable) = 0.1%.

Part a (0.5 points)

Explain whether the GLM output supports including territory as a rating variable.

Part b (0.75 points)

Briefly describe three benefits of using multivariate methods over univariate methods for classification ratemaking.

Part c (0.25 points)

Briefly describe how spatial smoothing can be used to improve territory relativity estimates.

Answer this question and see the worked solution

Concepts tested

• Generalized Linear Model
• Territory Ratemaking
• Classification Ratemaking
• Predictive Analytics

More questions from this set

• CAS Exam 5 Fall 2017, Question 10
• CAS Exam 5 Fall 2017, Question 12