CAS Exam 5 Fall 2019, Question 5
Study guide: Exam 5
Given the following to be used in developing a rate indication effective January 1, 2021:
- All policies are annual.
- Rates are expected to be in effect for one year.
- The selected annual loss trend is 2%.
Part a (0.5 points)
Calculate the loss trend factor applied to losses from accident year 2018.
Part b (0.5 points)
Calculate the loss trend factor applied to losses from policy year 2018.
Part c (0.5 points)
Explain why trending and developing losses do not result in overlapping adjustments.
Answer this question and see the worked solution