Adjustments to Ratemaking Data
Free SOA Exam FAM (Fundamentals of Actuarial Mathematics) lesson in Pricing and Reserving for Short-Term Insurance Coverages. 14 min read, ~2,164 words.
Three adjustments (D-T-O): develop losses to ultimate, trend losses, and on-level the premium; all three are required. Adjusted LR = (Ultimate Losses Trend Factor) / On-Level EP. Trend factor =, where runs from the historical-year midpoint to the future policy-period midpoint. Compound frequency and severity multiplicatively, never add the two...
Read the full lesson, free →
Worked examples and practice. Free with a free account, no card.
What this lesson covers
- Content
- Example 1
- Example 2
- Example 3
- Example 4
- Common Mistakes
- Check Your Understanding
- Exam Shortcuts
Learning objectives
- 5c
Browse all free Exam FAM lessons or jump into free Exam FAM practice questions.