Hi, I have questions about 2018 April Q5 (ii), where it asked about the average inception date with the following information: A general insurer specialises in employers’ liability policies and has a portfolio of 18,000 policies written on a losses occurring basis. Around one third of the policies incept on 1 January each year, with another third incepting on 1 April. The remainder incept reasonably evenly over the second half of the calendar year. (ii) Estimate the average date of accident for the company’s policies incepting in 2016, stating all assumptions made. The answer simply shows 1/3 equals 1st May, could anyone explain why is that?
6,000 policies incept 1/1, 6,000 incept 1/4 and the remaining 6,000 incept uniformly over the period 1/7 to 31/12, so one average they incept midway through this period, ie 1/10. Hence average inception date = (6000*1+6000*4+6000*10)/18000, ie 1/5.
