E
evergreen
Member
In my opinion, the exam was balanced in terms of its difficulty, nevertheless, it was difficult as compared to the last three sessions. Major issue was that of time management.
Q No 3 : An exponential aggregate loss function was given. It was required to calculate the probability of NO ruin by the end of 2nd year. Annual premium was 15 and the mean of the exponential distribution was 10. (5)
Q No 7 : Experience rating question
(a) Write down the transition matrix (4)
(b) Calculate the steady state equilibrium proprtions of policyholders at different discount levels and express them in terms of "k" (4)
(c) Calculate the average premium of high risk category policyholders (2)
(d) Comment on the difference in the avg premiums (2)
Q No 6 : Cumulative claims were given and reserve was required to be calculated by using:
(a) Chain Ladder Method (6)
(b) Bornhueter Ferguson Method (6)
I think, in this question we can calculate the probability either by assuming the normal approximation or directly calculating the integral of exponential function.
I think in the calculation of reserve, we had to include the total value of incurred claims because neither it was stated that the claims have been paid nor any paid value was given.
In my opinion, the exam was balanced in terms of its difficulty, nevertheless, it was difficult as compared to the last three sessions. Major issue was that of time management.
I used the normal approximation..
Could anybody else confirm which approach is correct/appropriate..??
Yes I agree with evergreen that neither it was stated that the claims have been paid nor any paid value was given so there seem to be some confusion here..