CAS Exam 5 Spring 2019, Question 10
Study guide: Exam 5
Given the following information for the rating variables vehicle class, driver type, and territory:
Exposures by Vehicle Class and Territory:
| Vehicle Class | Territory 1 | Territory 2 | Territory 3 |
|---|---|---|---|
| A | 30 | 15 | 200 |
| B | 80 | 22 | 104 |
| C | 20 | 80 | 60 |
Exposures by Driver Type and Territory:
| Driver Type | Territory 1 | Territory 2 | Territory 3 |
|---|---|---|---|
| X | 50 | 45 | 140 |
| Y | 80 | 72 | 224 |
Losses ($000s) by Vehicle Class and Territory:
| Vehicle Class | Territory 1 | Territory 2 | Territory 3 |
|---|---|---|---|
| A | 30 | 15 | 200 |
| B | 100 | 33 | 135 |
| C | 30 | 200 | 105 |
Losses ($000s) by Driver Type and Territory:
| Driver Type | Territory 1 | Territory 2 | Territory 3 |
|---|---|---|---|
| X | 40 | 65 | 115 |
| Y | 120 | 180 | 325 |
- All segments are fully credible.
- Vehicle class A, Driver type X, and Territory 1 are used as the bases.
Propose rating factors for all three variables using a univariate method, considering any exposure correlation.
Part a (2.75 points)
Answer this question and see the worked solution