CAS Exam MAS-II Fall 2018, Question 6
Study guide: Exam MAS-II
You are given the following information:
- A block of insurance policies had 1,384 claims this period.
- The claims had a mean loss of 55 and variance of loss of 6,010.
- The mean frequency of these claims is 0.085 per policy.
- The block has 21,000 policies.
- Full credibility is based on a coverage probability of 98% for a range of within 5% deviation from the true mean.
You calculate the partial-credibility factor for severity, Z_X, and the partial-credibility factor for pure premium, Z_P, using the limited-fluctuation credibility method.
Calculate the absolute difference between Z_X and Z_P.
- A) Less than 0.05
- B) At least 0.05, but less than 0.15
- C) At least 0.15, but less than 0.25
- D) At least 0.25, but less than 0.35
- E) At least 0.35
Answer this question and see the worked solution
Concepts tested
- Partial Credibility
- Limited Fluctuation Credibility
- Full Credibility Standard
- Coefficient of Variation