SOA GIRRGeneral Insurance — Ratemaking & Reserving
- GIRR · Q1Multiple choiceRatemaking: indications, trend, on-level, classification
Historical average severity is 10,000 at an average accident date 2.5 years before the projected period's average accident date. Severity trend is 3% per year. Calculate projected severity.
- GIRR · Q2Written answerRatemaking: indications, trend, on-level, classification
An insurer's workers' compensation experience shows a 12% indicated increase overall, but the largest class shows −5% and a small class shows +60%. Describe how you would develop class relativities, address credibility, and ensure the overall change is achieved (off-balance).
- GIRR · Q3Multiple choiceRatemaking: indications, trend, on-level, classification
Current average severity is 5,000. Annual severity trend is 4%, and the average accident date shifts forward by 3 years to the projected period. Calculate the trended severity.
- GIRR · Q4Written answerRatemaking: indications, trend, on-level, classification
An overall rate indication is +12%, but individual class indications range from −5% to +60% with widely varying credibility. Describe a process to set final class rate changes that reflects credibility while achieving the overall indicated change, and note one practical constraint an actuary would also consider.