CAS Exam 8 Fall 2016, Question 1

Study guide: Exam 8

A group of insureds have different expected claim frequencies. The number of insureds claim-free for the past $t$ years is as follows:

Expected Claim Frequency	t=0	t=1	t=2	t=3
0.05	50,000	47,500	45,000	44,000
0.10	50,000	45,000	43,000	36,000
0.20	25,000	20,500	16,500	14,000
Total	125,000	113,000	104,500	94,000

Determine whether the variation of an individual insured's chance for an accident changes over time.

Part a (2.75 points)