CAS Exam 7 Spring 2012, Question 16
Study guide: Exam 9
A \chi-plot of indemnity amounts and ALAE amounts for auto physical damage claims is shown below.
Part a (1 point)
Explain what the chi (\chi) and lambda (\lambda) variables measure.
Part b (0.5 points)
Based on the \chi-plot, draw a conclusion regarding the auto physical damage book of business.
Answer this question and see the worked solution