CAS Exam 7 Spring 2018, Question 9

Study guide: Exam 7

Given the following information:

• The all-year weighted average is used to calculate the age 1 to age 2 factor.
• An actuary believes that the all-year weighted average is inappropriate.

Part a (0.75 points)

Support the actuary's claim and provide two methods that could improve the estimated age-to-age factor considering the chart above.

Part b (0.5 points)

Describe an alternative method of testing the stability of the age-to-age factors based on Venter Factors.

Answer this question and see the worked solution

Concepts tested

• Development Factor
• Chain Ladder Method
• Changing Settlement Rate Model
• Correlated Chain Ladder Model
• Chain Ladder Assumptions

More questions from this set

• CAS Exam 7 Spring 2018, Question 8
• CAS Exam 7 Spring 2018, Question 10