CAS Exam 7 Spring 2017, Question 4
Study guide: Exam 7
Given the following data and growth curve as of December 31, 2016:
| Accident Year | Onlevel Premium ($000) | Reported Losses ($000) |
|---|---|---|
| 2012 | 1,000 | 400 |
| 2013 | 1,300 | 450 |
| 2014 | 1,600 | 400 |
| 2015 | 1,900 | 250 |
| 2016 | 2,200 | 50 |
G(x) = \frac{x^{1.8}}{x^{1.8} + 50^{1.8}}, whereGis the cumulative proportion of ultimate losses reported andxis the average age in months.
Test for expected loss ratio constancy across accident years.
Part a (1.5 points)
Answer this question and see the worked solution