CAS Exam 7 Spring 2014, Question 14
Study guide: Exam 7
Given the following reinsurance company data ($000) evaluated as of December 31, 2013:
| Calendar/Accident Year | Earned Risk Pure Premium | Adjusted Premium | Aggregate Reported Loss |
|---|---|---|---|
| 2010 | 5,000 | 5,000 | 3,000 |
| 2011 | 4,500 | 5,500 | 2,500 |
| 2012 | 5,000 | 6,000 | 2,500 |
| 2013 | 6,500 | 6,500 | 1,500 |
| Total | 20,000 | 23,000 | 9,500 |
| Age | Reported Loss Development Factors to Ultimate |
|---|---|
| 12 months | 2.50 |
| 24 months | 2.00 |
| 36 months | 1.60 |
| 48 months | 1.25 |
| 60 months | 1.00 |
- Adjusted premium incorporates changes in primary rates, underwriting, and exposure affecting the loss potential.
Calculate the Stanard-Bühlmann (Cape Cod) ultimate loss ratio for 2011.
Part a (2 points)
Answer this question and see the worked solution