Ratemaking Objectives and Data
Free SOA Exam FAM (Fundamentals of Actuarial Mathematics) lesson in Pricing and Reserving for Short-Term Insurance Coverages. 9 min read, ~1,302 words.
Fundamental equation: Premium = Losses + LAE + UW Expenses + Profit. Pure premium = Frequency Severity = Losses / Earned Exposures. Use earned premium and earned exposures, not written. Accident year preferred for losses (groups by when accident occurred). Calendar year OK for expenses (no development needed).
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What this lesson covers
- Content
- Example 1
- Example 2
- Common Mistakes
- Key Takeaways
- Exam Shortcuts
Learning objectives
- 5b
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