CAS Exam 8 Fall 2015, Question 18
Study guide: Exam 8
An actuary is given the following claims experience for large dollar deductible workers compensation insurance for five identically sized risks. Each claim is a separate occurrence.
| Risk # | Individual Claims Experience (Gross of Deductible): Claim 1 | Claim 2 | Claim 3 | Claim 4 |
|---|---|---|---|---|
| 1 | 70,000 | 80,000 | ||
| 2 | 165,000 | 300,000 | 250,000 | |
| 3 | 150,000 | |||
| 4 | 150,000 | 250,000 | 200,000 | 150,000 |
| 5 | 250,000 |
Calculate the expected loss cost for a risk identical to the five above with a per-occurrence deductible of $150,000 and an annual aggregate deductible of $450,000.
Part a (2 points)
Answer this question and see the worked solution