General
Complete the following formula:
Required Premium =
( L + ____ ) / ( 1 - v - q )
Fixed Expenses
_______ is the actuarial adjustment to account for the fact that the final cost of a claim is unknown and usually grows over time.
Loss Development
The process of accounting for past rate changes is called this.
Current Rate Leveling
This type of expense accounts for the amount Allstate pays agents to sell and write policies for Allstate.
Commissions and Brokerage
Earthquakes, Hurricanes, and Wildfires are all examples of ____________.
Catastrophes
The main difference between weather and non-weather handling in the indication is concerning the ______ provision
frequency
The two components of a pure premium trend are the _____ trend and _____ trend.
Frequency and Severity
Widespread customer increases in deductible selections would likely result in a(n) ______ to the premium trend.
Decrease
The Texas Mold case is an example of this provision.
Contingency Provision
True/False: A regional hailstorm cannot be defined as a catastrophe.
False
Consider a 5% indication. The weighted loss trend is +10%, and the premium trend is 0%. What will the indication be next year, all else holding equal?
+ 15.0%
Rates in Effect: 1 Year
Policy length: 6 months
Projection date: ___________
11/17/2027
"Exposures are written and earned uniformly throughout the year" is the assumption for this CRL method.
Parallelogram
Taxes are calculated at the _____ level on a _____ premium basis.
State/Written
The two sources of negative loss development in physical damages are ______ and ______.
Salvage and Subrogation
An actuarially sound rate is note excessive, inadequate, or unfairly ___________
discriminatory
This step of the additive loss development method immediately follows the selection of inflation-adjusted losses per exposure
Detrending of losses to AY levels
In addition to premium/Fixed Expense trending, the Allstate indication also trends ____ for use in certain provisions, such as the NCOR provision.
AIY (Amount of Insurance Years)
The Fama-French 3 Factor model includes 3 components: _____, as well as the small-company effect and Book-value-to-market-value effect.
CAPM
True/False: Liability coverages tend to have more credibility than physical damage coverages.
False
To support Allstate’s strategic plan, the rates should balance ease, competitiveness and ________ to facilitate profitable growth
sophistication
This effect is where distributional shifts in grouped trends cause an artificial trend
Andorful Effect
Current Rate Leveling
Investment Income
The credibility methodology Allstate uses is called the _____ Power Approximation.
Normal