Applied Statistics and Probability for Engineers
6th Edition
ISBN: 9781118539712
Author: Douglas C. Montgomery
Publisher: WILEY
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Chapter 5.3, Problem 61E
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Questions
An insurance company's cumulative incurred claims for the last 5 accident years are given
in the following table:
Development Year
Accident Year 0
2018
1 2 3 4
245 267 274 289 292
2019
255 276 288 294
2020
265 283 292
2021
263 278
2022
271
It can be assumed that claims are fully run off after 4 years. The premiums received for
each year are:
Accident Year Premium
2018
306
2019
312
2020
318
2021
326
2022
330
You do not need to make any allowance for inflation.
1. (a) Calculate the reserve at the end of 2022 using the basic chain ladder method.
(b) Calculate the reserve at the end of 2022 using the Bornhuetter-Ferguson method.
2. Comment on the differences in the reserves produced by the methods in Part 1.
Chapter 5 Solutions
Applied Statistics and Probability for Engineers
Ch. 5.1 - Prob. 1ECh. 5.1 - Prob. 2ECh. 5.1 - Prob. 3ECh. 5.1 - 5-4. Four electronic printers are selected from a...Ch. 5.1 - 5-5. In the transmission of digital information,...Ch. 5.1 - 5-6. A small-business Web site contains 100 pages...Ch. 5.1 - 5-7. A manufacturing company employs two devices...Ch. 5.1 - 5-8. Suppose that the random variables X, Y, and Z...Ch. 5.1 - 5-9. An engineering statistics class has 40...Ch. 5.1 - 5-10. An article in the Journal of Database...
Ch. 5.1 - 5-11. For the Transaction Processing Performance...Ch. 5.1 - 5-12. In the transmission of digital information,...Ch. 5.1 - Prob. 13ECh. 5.1 - Prob. 14ECh. 5.1 - Prob. 15ECh. 5.1 - Prob. 16ECh. 5.1 - Prob. 17ECh. 5.1 - 5-18. The conditional probability distribution of...Ch. 5.1 - Prob. 19ECh. 5.1 - 5-20. The time between surface finish problems in...Ch. 5.1 - 5-21. A popular clothing manufacturer receives...Ch. 5.1 - 5-22. The blade and the bearings are important...Ch. 5.1 - Prob. 23ECh. 5.1 - Prob. 24ECh. 5.1 - 5-25. Determine the value of c that makes fXYZ (x,...Ch. 5.1 - 5-26. The yield in pounds from a day’s production...Ch. 5.1 - 5-27. The weights of adobe bricks used for...Ch. 5.1 - 5-28. A manufacturer of electroluminescent lamps...Ch. 5.1 - 5-29. The lengths of the minor and major axes are...Ch. 5.1 - 5-30. An article in Health Economics [“Estimation...Ch. 5.1 - 5-31. An article in Clinical Infectious Diseases...Ch. 5.1 - Prob. 32ECh. 5.2 - Prob. 33ECh. 5.2 - Prob. 34ECh. 5.2 - Prob. 35ECh. 5.2 - Prob. 36ECh. 5.2 - Prob. 37ECh. 5.2 - Prob. 38ECh. 5.2 - Prob. 39ECh. 5.2 - Prob. 40ECh. 5.2 - Prob. 41ECh. 5.2 - Prob. 42ECh. 5.2 - Prob. 43ECh. 5.2 - 5-44. Determine the covariance and correlation for...Ch. 5.2 - Prob. 45ECh. 5.2 - Prob. 46ECh. 5.2 - Prob. 47ECh. 5.3 - 5-48. Test results from an electronic circuit...Ch. 5.3 - Prob. 49ECh. 5.3 - Prob. 50ECh. 5.3 - 5-51. Four electronic ovens that were dropped...Ch. 5.3 - Prob. 52ECh. 5.3 - Prob. 53ECh. 5.3 - 5-54. In an acid-base titration, a base or acid is...Ch. 5.3 - Prob. 55ECh. 5.3 - Prob. 56ECh. 5.3 - Prob. 58ECh. 5.3 - 5-59. If X and Y have a bivariate normal...Ch. 5.3 - 5-60. Show that the probability density function...Ch. 5.3 - Prob. 61ECh. 5.4 - Prob. 62ECh. 5.4 - 5-63. X and Y are independent, normal random...Ch. 5.4 - 5-64. Suppose that the random variable X...Ch. 5.4 - 5-65. A plastic casing for a magnetic disk is...Ch. 5.4 - 5-66. Making handcrafted pottery generally takes...Ch. 5.4 - 5-67. In the manufacture of electroluminescent...Ch. 5.4 - 5-68. The width of a casing for a door is normally...Ch. 5.4 - 5-69. An article in Knee Surgery Sports...Ch. 5.4 - 5-70. An automated filling machine fills...Ch. 5.4 - 5-71. The photoresist thickness in semiconductor...Ch. 5.4 - 5-72. Assume that the weights of individuals are...Ch. 5.4 - 5-73. Weights of parts are normally distributed...Ch. 5.4 - Prob. 74ECh. 5.4 - Prob. 75ECh. 5.4 - Prob. 76ECh. 5.4 - Prob. 77ECh. 5.4 - Prob. 78ECh. 5.5 - 5-79. Suppose that X is a random variable with...Ch. 5.5 - 5-80. Let X be a binomial random variable with p =...Ch. 5.5 - 5-81. Suppose that X is a continuous random...Ch. 5.5 - 5-83. A random variable X has the probability...Ch. 5.5 - Prob. 84ECh. 5.5 - Prob. 85ECh. 5.5 - Prob. 86ECh. 5.5 - Prob. 87ECh. 5.5 - Prob. 88ECh. 5.5 - 5-89. The computational time of a statistical...Ch. 5.5 - Prob. 90ECh. 5.6 - Prob. 91ECh. 5.6 - Prob. 92ECh. 5.6 - 5-93. The geometric random variable X has...Ch. 5.6 - 5-94. The chi-squared random variable with k...Ch. 5.6 - Prob. 95ECh. 5.6 - Prob. 96ECh. 5.6 - Prob. 98ECh. 5.6 - Prob. 99ECh. 5.6 - 5-100. Suppose that Xi has a normal distribution...Ch. 5 - Prob. 101SECh. 5 - 5-102. The percentage of people given an...Ch. 5 - Prob. 103SECh. 5 - Prob. 104SECh. 5 - Prob. 105SECh. 5 - Prob. 106SECh. 5 - Prob. 107SECh. 5 - Prob. 108SECh. 5 - Prob. 109SECh. 5 - 5-110. The weight of adobe bricks for construction...Ch. 5 - Prob. 111SECh. 5 - Prob. 112SECh. 5 - Prob. 113SECh. 5 - Prob. 114SECh. 5 - Prob. 116SECh. 5 - Prob. 117SECh. 5 - Prob. 118SECh. 5 - Prob. 119SECh. 5 - 5-120. An order of 15 printers contains 4 with a...Ch. 5 - Prob. 121SECh. 5 - Prob. 122SECh. 5 - Prob. 123SECh. 5 - Prob. 124SECh. 5 - Prob. 125SECh. 5 - Prob. 126SECh. 5 - Prob. 127SECh. 5 - Prob. 128SECh. 5 - Prob. 129SECh. 5 - Prob. 130SECh. 5 - Prob. 131SECh. 5 - Prob. 132SE
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