CAS Exam 8 Fall 2016, Question 11
Study guide: Exam 8
Given the following information about 10 risks for a manufacturing class:
| Risk | Type of Manufacturing | Manual Premium | Losses | Current Modification | Proposed Modification |
|---|---|---|---|---|---|
| 1 | Uses Robots | 1,000 | 500 | 0.65 | 0.50 |
| 2 | Uses Robots | 1,000 | 600 | 0.75 | 0.55 |
| 3 | Made by hand | 1,000 | 700 | 0.70 | 0.70 |
| 4 | Uses Robots | 1,000 | 800 | 1.00 | 0.75 |
| 5 | Uses Robots | 1,000 | 900 | 0.90 | 0.95 |
| 6 | Made by hand | 1,000 | 1,100 | 1.15 | 1.05 |
| 7 | Uses Robots | 1,000 | 1,200 | 1.10 | 1.25 |
| 8 | Made by hand | 1,000 | 1,500 | 1.25 | 1.50 |
| 9 | Made by hand | 1,000 | 1,600 | 1.20 | 1.75 |
| 10 | Made by hand | 1,000 | 1,800 | 1.30 | 2.00 |
Part a (3 points)
Evaluate the proposed experience rating plan compared to the current plan.
Part b (0.75 points)
Evaluate the classification plan for this class.
Answer this question and see the worked solution