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9.7. You are to calculate rates effective for the year beginning Jan. 1, 2020 for one-year policies using the loss cost nethod. You are given the following data: Accident Earned Exposure Earned Ultimate Losses Year Units Premium (Fully Developed) 2017 855 750,015 572,850 2018 886 780,120 564,825 You are also given: (i) Rates are based on a weighted average with weights of 40% on 2017 and 60% on 2018. (ii) Trend is 5%. (iii) The permissible loss ratio is 65%. Calculate the gross rate.

9.7. You are to calculate rates effective for the year beginning Jan. 1, 2020 for one-year policies using the loss cost nethod. You are given the following data: Accident Earned Exposure Earned Ultimate Losses Year Units Premium (Fully Developed) 2017 855 750,015 572,850 2018 886 780,120 564,825 You are also given: (i) Rates are based on a weighted average with weights of 40% on 2017 and 60% on 2018. (ii) Trend is 5%. (iii) The permissible loss ratio is 65%. Calculate the gross rate.

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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9.7. You are to calculate rates effective for the year beginning Jan. 1, 2020 for one-year policies using the loss cost method. You are given the following data: Earned Exposure Units Accident Earned Ultimate Losses Year Premium (Fully Developed) 750,015 780,120 2017 855 572,850 564,825 2018 886 You are also given: (i) Rates are based on a weighted average with weights of 40% on 2017 and 60% on 2018. (ii) Trend is 5%. (iii) The permissible loss ratio is 65%. Calculate the gross rate.
Transcribed Image Text:9.7. You are to calculate rates effective for the year beginning Jan. 1, 2020 for one-year policies using the loss cost method. You are given the following data: Earned Exposure Units Accident Earned Ultimate Losses Year Premium (Fully Developed) 750,015 780,120 2017 855 572,850 564,825 2018 886 You are also given: (i) Rates are based on a weighted average with weights of 40% on 2017 and 60% on 2018. (ii) Trend is 5%. (iii) The permissible loss ratio is 65%. Calculate the gross rate.
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