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ST3 April 2006 Quesion 4(i) - Weighted Average Loss Ratio

Discussion in 'SP8' started by bledubd, Jan 17, 2022.

  1. bledubd

    bledubd Member

    The calculation for the weighted average loss ratio seems a bit dubious. They have summed up the individual UW year loss ratios and divided by 5. Is this the way to do it?
     
    bledubd, Jan 17, 2022
    #1
  2. Darren Michaels

    Darren Michaels ActEd Tutor Staff Member

    There is a typo in the examiners' report - the weighted average loss ratio shown of 97.2% is actually a simple average and the simple average shown of 96.5% is actually a weighted average.

    (As this question relates to pricing a quota share reinsurance contract it is more relevant to the current SP8 exam so I have moved this post to that forum.)
     
    Darren Michaels, Jan 17, 2022
    #2

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