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

B

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?
 
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.)
 
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