SOA Exam FAM Sample Question 93
Study guide: Exam FAM
You are given the following information on losses paid for each of AY1 through AY4:
| Incremental Loss Payments through Development Year | ||||||
|---|---|---|---|---|---|---|
| Accident Year | Earned Premium | Expected Loss Ratio | 0 | 1 | 2 | 3 |
| AY1 | 35,500 | 0.71 | 10,500 | 7,500 | 4,800 | 1,340 |
| AY2 | 31,200 | 0.73 | 13,050 | 5,025 | 1,400 | |
| AY3 | X |
0.75 | 12,500 | 7,250 | ||
| AY4 | X + 5{,}000 |
0.75 | 18,400 |
The estimated loss reserve using the expected loss ratio method is 43,412.
Calculate X.
- A) 48,964
- B) 49,674
- C) 51,875
- D) 52,174
- E) 54,785
Answer this question and see the worked solution