CAS Exam 8 Fall 2017, Question 9
Study guide: Exam 8
Consider the following claims-made commercial general liability policy:
- The insurance contract was originally written January 1, 2011, and has been renewed annually as a claims-made policy.
- The annual Premises/Operations basic limits manual premium is $200,000 and there is no products exposure.
- The expected loss ratio is 70%.
- Loss experience is evaluated as of June 30, 2016.
| Claim Number | Policy Year | Indemnity | ALAE |
|---|---|---|---|
| 1 | 2011 | $5,000 | $5,000 |
| 2 | 2012 | $15,000 | $25,000 |
| 3 | 2013 | $58,000 | $0 |
| 4 | 2013 | $20,000 | $85,000 |
| 5 | 2014 | $118,000 | $82,000 |
| 6 | 2015 | $8,000 | $5,000 |
Calculate the experience modified premium for the policy effective January 1, 2017.
Part a (3.25 points)
Answer this question and see the worked solution