Question 1. (a) (b) Company ABC sells homeowners insurance policies. List two coverages that are normally available in homeowners insurance policies. You are given the following information. The loss costs by accident year are: Accident Year AY1 AY2 AY3 AY4 Loss Cost 1200 1050 1600 1920 The slope of the straight line fitted to the natural log of the loss costs is 0.1125. AY4 experience is weighted 80% and AY3 experience is weighted 20% for rate development. New rates take effect on October 1, CY6 for one-year policies and will be in effect for one year. Cal- culate the expected loss cost for these new rates.

MATLAB: An Introduction with Applications
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Author:Amos Gilat
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Question 1.
(a)
(b)
Company ABC sells homeowners insurance policies.
List two coverages that are normally available in homeowners insurance policies.
You are given the following information. The loss costs by accident year are:
Accident Year
AY1
AY2
AY3
AY4
Loss Cost
1200
1050
1600
1920
The slope of the straight line fitted to the natural log of the loss costs is 0.1125. AY4
experience is weighted 80% and AY3 experience is weighted 20% for rate development. New
rates take effect on October 1, CY6 for one-year policies and will be in effect for one year. Cal-
culate the expected loss cost for these new rates.
Transcribed Image Text:Question 1. (a) (b) Company ABC sells homeowners insurance policies. List two coverages that are normally available in homeowners insurance policies. You are given the following information. The loss costs by accident year are: Accident Year AY1 AY2 AY3 AY4 Loss Cost 1200 1050 1600 1920 The slope of the straight line fitted to the natural log of the loss costs is 0.1125. AY4 experience is weighted 80% and AY3 experience is weighted 20% for rate development. New rates take effect on October 1, CY6 for one-year policies and will be in effect for one year. Cal- culate the expected loss cost for these new rates.
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