SOA Exam FAM Sample Question 71
Study guide: Exam FAM
You are given the following information:
| Accident Year | Earned Premium | Expected Loss Ratio | Cumulative Loss Payments through Development Month 12 | 24 | 36 | 48 |
|---|---|---|---|---|---|---|
| AY5 | 19,000 | 0.90 | 4,850 | 9,700 | 14,100 | 16,200 |
| AY6 | 20,000 | 0.85 | 5,150 | 10,300 | 14,900 | |
| AY7 | 21,000 | 0.91 | 5,400 | 10,800 | ||
| AY8 | 22,000 | 0.88 | 7,200 |
There is no development past 48 months.
Calculate the indicated loss reserve using the Bornhuetter-Ferguson method and volume-weighted average loss development factors.
- A) 22,600
- B) 23,400
- C) 24,200
- D) 25,300
- E) 26,200
Answer this question and see the worked solution