Indication Jeopardy

Loss Adjustments

100

The expected claims method suffers from a disadvantage of having to select this.

ELR

200

The BF method is a credibility weighted method between the Expected Claims and the _____ method.

Link Ratio

300

If the weighted net trend increases by 1%, the Required Premium should increase by ______ (greater/less) than 1%.

Greater

400

AY incurred loss trends suffer from changing reserves. To adjust for this, Allstate makes this adjustment to AY trends.

Cap development at emergence at 12 months.

500

In the BF method, the credibility weight given to the Link Ratio method is ____.

% Paid, or 1/CDF

Other Adjustments

100

When exposures are written uniformly, this method produces roughly the same result as the parallelogram method.

Miller-Davis-Karlinski

200

ULAE provision calculation uses this as the denominator.

Incurred Losses

300

These two auto coverages are expected to have similar distributional trend shifts.

BI and UM or PD/Coll

400

Z has 3 properties: it lies between 0 and 100%, it increases as data increases, and _________.

It increases at a decreasing rate.

500

In our AY weights, we use a credibility procedure which assumes these k and P values.

k = .05, P = 90%

Indication Provisions

100

RRP is calculated using this type of market

Catastrophe Bonds Market

200

The W/H Covariance provision is recognizing covariance between these two statistics in the W/H peril.

Frequency/Severity

300

In our calculation of the Profit Provision, our cost of equity comes from the combination of these two models.

DCF and FF3F

400

Risk mitigation incentives is one reason for Allstate and the industry's usages of this provision in our indication

RRP

500

Other Acquisition is calculated at the CW level except for this portion of Other Acquisition Expenses

Adjustment for write-offs and fees

MISC 1

100

The recent increase in minimum retention of upper layer losses from 500M to 750M should have an upward/downward impact on gross reinsurance premiums.

Downward.

200

A downward shift in WP trends would likely indicate what incoming shift as well?

Downward shift in CY paid trends long-term

300

List the 3 types of reserves, as well as the formula for total loss.

Paid + Case R + Supp R (IBNER) + IBNR Reserve (True IBNR)

400

List the 3 portions of the FF3F model

CAPM + Small Company Effect + Book Value to Market Value Effect

500

The Mayerson, Jones, and Bowers method was developed to challenge this particular assumption with the square root rule.

Constant Severity

MISC 2

100

ASOP stands for:

Actuarial Standards of Practice

200

Where do we use 15 vs 12 months of development in our indication?

Property (12mo) and Vehicle (15mo)

300

True/False: Higher-layer NCOR contracts purchased by Allstate tend to cover 100% percent of losses in that layer.

False

400

This type of indication may warrant a historical premium trend.

Loss Ratio Indication

500

List 2 of the four CAS principles of Ratemaking.

1. A rate is an estimate of the expected value of future costs 

2. A rate provides for all costs associated with the transfer of risks 

3. A rate provides for the costs associated with an individual risk transfer 

4. A rate is reasonable and not excessive, inadequate, or unfairly discriminatory if it is an actuarially sound estimate of the expected value of all future costs associated with an individual risk transfer