Siewert

Question 1

Loss Ratio Method

Answer 1

PEx = excess of occurrence limit
PE(1-x)O = excess of aggregate limit

Question 2

Occurrence charge, X

Answer 2

% of losses above deductible

Question 3

Aggregate charge

Answer 3

% of losses in deductible layer that exceed aggregate

Question 4

Implied development method

Answer 4

XS = Unlimited - Limited

Question 5

Direct development

Answer 5

Estimate XSLDF from limited and unlimited LDFs and apply XSLDF directly to excess losses

Question 6

Relationship of LDF and limited LDF

Answer 6

LDF(limited) = LDF*change in relative severities

Question 7

Relationship of LDF and excess LDF

Answer 7

XSLDF = LDF*(change in 1 - relative severities)

Question 8

LDF as function of limited and excess LDFs

Answer 8

LDF = R*LDF + (1 - R)*XSLDF
R = ratio of limited to unlimited severity at time t

Question 9

Relationship between limited and unlimited incremental LDF

Answer 9

ILDF(limited) = ILDF*change in relative severities

Question 10

Relationship between excess and unlimited incremental LDF

Answer 10

IXSLDF(limited) = ILDF*(change in 1 - R)