Could someone explain why we don't need to change written premium to earned premium on April 2006 Q 4(I)? We are using incurred losses, so I thought in order to calculate the loss ratio we would need to use earned premiums?
The data provided is on an underwriting year basis so the correct premiums to use would be written premiums and not earned premiums. In the solution to part (i) one of the assumptions is that the incurred claims are effectively ultimate claims in that they include IBNR/IBNER. Remember the glossary gives you two possible definitions for incurred claims. Written Premiums and Ultimate Claims on an underwriting year basis are consistent with each other.
