CAS Exam 5 Practice Questions - CAS Exam 5 Basic Ratemaking And Estimating Claim Liabilities Exam

The loss ratio method computes the indicated rate change as:

(Experience loss ratio plus fixed expense ratio) divided by target loss ratio, minus 1 Experience loss ratio divided by (target loss ratio plus variable expense ratio) (Pure premium plus fixed expense per exposure) divided by current rate Target loss ratio multiplied by (1 plus trend factor)

Correct Answer:

(Experience loss ratio plus fixed expense ratio) divided by target loss ratio, minus 1

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