Calculate projected losses using trend analysis.
Free SOA Exam ASTAM (Advanced Short-Term Actuarial Mathematics) lesson in Reserving and Pricing for Short-Term Insurance Coverages. 12 min read, ~1,744 words.
Projected loss = historical loss × trend factor × loss development factor (other adjustments as needed). Trend factor =, where is the annual trend rate and is the trend period in years, measured mid-point to mid-point. Two-step trend: past trend (experience mid-point to anchor), future trend (anchor to future policy...
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What this lesson covers
- Content
- Example 1
- Example 2
- Common Mistakes
- Check Your Understanding
- Exam Shortcuts
Learning objectives
- 6c
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