Fit exponential or linear trends to exposures, premiums, and losses, and apply them over the correct trend periods.
Free CAS Exam 5 (Basic Ratemaking and Reserving) lesson in Ratemaking. 25 min read, ~3,732 words.
Trend projects a quantity to the future policy period; the two moving parts are the annual trend factor and the trend period (length in years). Exponential trend multiplies by; linear trend adds slope times t. Losses and severity default to exponential because inflation compounds. Fit exponential by regressing on time...
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What this lesson covers
- Content
- Example 1
- Example 2
- Example 3
- Example 4
- Common Mistakes
- Check Your Understanding
- Exam Shortcuts
Learning objectives
- A8
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