T
thistleandspice
Member
Here's another one...
The core reading says that "a stop loss contract is priced using similar methods for other XoL reinsurance, but where the excess point and limit can be expressed as a loss ratio rather than a monetary amount...A view of the loss ratio can be derived from historical experience, suitably adjusted, in a similar way to that described for QS/Surplus."
ie. to get the loss ratio, use triangulation methods, develop to ult, and then find distribution of as-if LR's.
That's all fine...
But how do we then go from having a LR distribution, to getting the premium for the contract? Don't really see where the notes make this connection.
Thank you!
thistle
The core reading says that "a stop loss contract is priced using similar methods for other XoL reinsurance, but where the excess point and limit can be expressed as a loss ratio rather than a monetary amount...A view of the loss ratio can be derived from historical experience, suitably adjusted, in a similar way to that described for QS/Surplus."
ie. to get the loss ratio, use triangulation methods, develop to ult, and then find distribution of as-if LR's.
That's all fine...
But how do we then go from having a LR distribution, to getting the premium for the contract? Don't really see where the notes make this connection.
Thank you!
thistle