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The results of development are shown in the first table of the solution. For example, the projected third party personal injury costs for...

You may be thinking of excess of loss scales. Exposure curves / first loss scales are concerned with expected losses in primary layers with...

The normal definition of the risk premium is “the amount of premium required to cover the expected cost of claims”. Hence you don’t need to...

In question 15.7, there is no deductible D so we do not need the formula on page 26. Look back to the formulae and notation on page 24 instead....

The burning cost is a rate. It's the actual claims expressed as an annual rate per unit of exposure. (Some practitioners use “burning cost” to...

Well spotted! Most UK and overseas dividends are tax exempt for corporate members. Thanks for pointing this out and sorry if it confused you....

Hi Snowy The percentage increase in variance in moving from the Bayesian to the Classical approach is found using the formula in section 3.4 of...

It should say "at the end of 2008". This is correct in the current version of the Question and Answer Bank. For the benefit of others reading...

Hi Snowy Thanks for your query. The expected losses to the primary layer with limit 0.5M are higher if we assume curve A is appropriate...

I think marymaj86 has answered the question well. Perhaps what’s confusing you is that claims-made policies may very occasionally require both...

Yes, that's right.

Officially, all the material from the CTs is potentially examinable in the later subjects including ST8, but it’s best to focus on what’s...

Thank you for drawing our attention to this. It is a mistake on flashcard number 11. The mu should not be squared in the solution. We are sorry...

Usually “response variable” means the Y variable, so we could have a claim frequency model with: Y= response variable = claim frequency....

See section 6.2 of Chapter 12. We load the price per policy for the cost of reinsurance. To avoid confusion for other students reading this,...

This could be done through a reciprocal arrangement: each insurer reinsures a block of business with the other. Both insurers benefit from...

Not all policies coming up to the renewal date will be invited to renew. The denominator for the lapse rate is the number of policies actually...

I think you are still looking at the 2010 ST8 notes. You are referring to Section 9.5 of Chapter 10 in the 2011 notes. A good example is...

Just to avoid confusion for other students reading this, I think you are referring to Section 2.1 of Chapter 8. There is a need to consider loss...

Yes, the types of item you suggest (magnitude etc) are the “model parameters”. A modelling agent would be assigned for the bond (eg AIR) at the...

For the benefit of other students reading this, I think you are referring to Section 1.6 of Chapter 7. Modelled loss triggers may be preferred...

I think you can understand most of the ST8 material on its own without needing to refer back to CT6. Subject CT6 covers some of the mathematical...

Hi Jensen The OCR and URR are two distinct components of the technical reserves. The OCR is the reserve for claims and expenses in respect of...

If you had an Aggregate XL contract 500 xs 500 with an interior deductible of 50, then you would apply the deductible to each individual claim...

(i) Artzner (and others) drew up a list of axioms that they intended to be self-evidently desirable in an attempt to define a “good” risk measure...

You're right. The 0.8 is not required. Well spotted. We'll change the solution for next year and add it to the Corrections document. Thanks...

Hi I agree with you that the variance of the aggregate losses is not the same as that of the pure premium as defined at the start of Section...

Hi You need to look at (adjusted NCI)/NWP to calculate the INCR figures. The NWP is just 78% of the GWP. Firstly, take your GCI, adjusted to...

The order of subtraction for the test in the notes is determined by which model has more degrees of freedom. In the Core Reading, model 1 is the...

Hi Suppose model X has d(X) degrees of freedom and scaled deviance D(X) and model Y has d(Y) degrees of freedom and scaled deviance D(Y). If d(Y)...

Hi Everything in the Core Reading is examinable but maths is not the focus of ST8. Have a look at April’s ST8 exam paper, the specimen ST8...

Hi Exam_Machine I agree with you that a monotonic function should preserve the order of the inequalities. We do point out in the ActEd Course...

Hi The Subject ST7/8 ASET covers relevant past paper questions going back to April 2006. The grid in the introduction covers the same period,...

Mack's theory gives a formula for the mean squared error of the reserve (the prediction uncertainty). For each accident year, this can be...

I haven't received a definitive answer but what the Profession has said is that the examiners will be made aware of the issues. Students will be...

Yes, you're right. Thanks for drawing this to our attention. ActEd will issue a correction to this. We're sorry for any inconvenience this has...

I have already contacted the Profession again about this. I was assured on Monday that it is being looked into. I will let you know as soon as I...

My comment regarding the possibility that there might be no individual policy with a relativity of one for all factors was just an aside. It is...

Thank you for your thoughts on this. The item you have questioned is part of the Core Reading so I have brought this to the attention of the...

(1) The signs do need to change: it should be -10 and -20 as you indicate. I also agree that we need an assumption of independence. Thank you for...

Thanks for your question. The GLM software will calculate the figure that relates to the base risk (i.e. the risk with a relativity of 1 for all...

The k in the Bayesian credibility formula is not the same as the k discussed in the section on Classical credibility. It does not denote a...

The end of December is 12 months, so the end of November is 11 months. Hence the start of November is 10 months and so two thirds of the way...

The Profession has confirmed that the Core Reading text is the wrong way round. The "16-20" line represents young drivers and the "50-54" line...

Thank you for drawing our attention to this. For the benefit of other students reading this, the curve in question is the very faint line above...

We have issued a correction to the Buhlmann-Straub model section within chapter 18 to enhance the Core Reading. On the main page of the ActEd...

According to the Actuarial Tables, the canonical link function for the gamma distribution is g(mu)=1/mu. However, we do not always use the...

Your understanding appears correct now. Looked at another way, if we choose our link function g to be log, then g^(-1) is the exponential...

Thank you for pointing this out.

I agree that the Core Reading text appears to be the wrong way round. It should say that the '16-20' line represents young drivers. ActEd will ask...

Thank you for pointing this out. Just to avoid confusion for other students reading the forum, I think you are referring to the solution to part...