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

Discussion in 'SP8' started by bledubd, Jan 17, 2022.

  1. bledubd

    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?
     
  2. Darren Michaels

    Darren Michaels ActEd Tutor Staff Member

    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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