claims incurred in the year come from policies written in the previous and the current year.
If our total exposure is 2 units:
1 unit from policies written in the previous year
1 unit from policies written in this year
we have 1/4 unit under the new cover:
On average claims under new cover occur middle of new cover period.
therefore 1/4 divided by 2 units is 1/8
Last edited by a moderator: Mar 31, 2008