Overall Average Rates and Rate Changes
Free SOA Exam FAM (Fundamentals of Actuarial Mathematics) lesson in Pricing and Reserving for Short-Term Insurance Coverages. 9 min read, ~1,346 words.
Loss cost method: Indicated Rate = Indicated PP / PLR. Rate Change = Indicated Rate / Current Rate - 1. Loss ratio method: Rate Change = Adjusted LR / Target LR - 1. Both methods are algebraically equivalent from the same data. LCM (Loss Cost Multiplier) = 1 / PLR...
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What this lesson covers
- Content
- Example 1
- Example 2
- Common Mistakes
- Key Takeaways
- Exam Shortcuts
Learning objectives
- 5e
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