The 1st question of the paper says "Claims occur on a Portfolio of Insurance Policies according to a POISSON Process at a rate (lambda).................................................." The solution in the examiners report to this question says "The time until the first claim follows an EXPONENTIAL distribution with parameter (lambda).........................." Is there anything wrong with the solution/ or has insufficient information been supplied in the question??
Poisson/exponential Veeko, One of the properties of a poisson process is that the time until first "event" is exponentially distributed, with same parameter as for the poisson distribution. From memory, proving this relationship is something that came up quite often in 101. In the later exams, it's often assumed knowledge, which is probably why the examiners have just quoted the result.
Re: Poisson/ Exponential Thanks for that Paul! My CT3 isn't 100% up to scratch as I did it ages ago and seems to be a cobweb in the corner of my brain! Pity though..... it should be more than that for the sake of studying CT6....
