Term Test 1_solutions

0 - ACTSC - 462

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Unformatted text preview: d not just the base rate (i.e. we don’t want to measure the change in the base rate, we want to measure the change in average premium level of the book) {See lecture #2, slide 22 for extension of exposures method. Slide 23 notes that the parallelogram method assumes policies are written evenly throughout the year. See page 73 of text for calculation} (3) 3. Determine the loss trend factors to be used for accident year 2009 for a ratemaking analysis, based on the following assumptions: • Rates will be in effect for every policy that renews or is a new issue for 1 year effective January 1, 2013 • All policies are written as 6 month policies • Past tre...
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