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MATH 3640 – Assignment
Show your work! Upload your file into HuskyCT: Excel, pdf, Word, pdf of a picture of your hand-written, etc. If you’re having uploading issues, just email it to me (on time…) 1) (1.5 points) Given an annual premium trend of 10%, using one-step trending, what factor should be applied to project Calendar Year 2022 Earned Premiums, assuming semi-annual policies with a proposed rate effective date of 1/1/2025, where rates are expected to be in effect for 2 years? 2) (1.75 points) Given an annual premium trend of 5%, using one-step trending, what factor should be applied to project Policy Year 2022 Earned Premiums, assuming semi-annual policies with a proposed rate effective date of 1/1/2025, where rates are expected to be in effect for 3 years? 3) (4.25 points) Given the following information, use two-step trending to calculate EPAPR at prospective levels in total, for all historical years given: Semi-annual policies, written uniformly throughout the year Projected premium trend = 8% Proposed rate effective date is 7/1/2025 Rates will be in effect for 1.5 years Calendar Year EPAPR Avg EPAPR Avg On-Leveled WP 2020 5,000,000 4,900 5,000 2021 5,100,500 5,050 5,050 2022 5,500,000 5,150 5,100 2023 5,900,000 5,850 6,000 4) (5.5 points) Given the following information, use two-step trending to calculate EPAPR at prospective levels in total, for all historical periods given: Semi-annual policies, written uniformly throughout the year Projected premium trend = 10% Proposed rate effective date is 10/1/2025 Rates will be in effect for 2.5 years Calendar Qtr EPAPR Avg EPAPR Avg On-Leveled WP 2022Q1 1,500,000 1,900 1,000 2022Q2 1,600,500 1,050 1,050 2022Q3 1,500,000 1,150 1,100 2022Q4 1,900,000 1,850 1,900 2023Q1 2,000,500 1,900 2,000 2023Q2 2,100,000 2,050 2,500 5) (1.75 points) Calculate the factor to be applied to Accident Year 2022 historical losses to trend them to the prospective period: 1.5% annual loss trend Semi-Annual policies Proposed rate effective date: 4/1/2025 Rates will be in effect for 1.5 years 6) (2.75 points) Given the following information, calculate the Adjustment Factor for 3Q2023 AY Losses: A change was implemented on 4/1/2023 that only affects losses on policies written on or after 4/1/2023. The direct effect of the change for semi-annual policies on an accident year basis is estimated at +10%. Another change was implemented on 7/1/2023 that affects losses on policies currently in-force at the time. The direct effect of the change for semi-annual policies on accident year basis is estimated at -5%. 7) (2.5 points) Assuming a 15% ground-up loss trend and a $10,000 limit, calculate the impact on the excess layer using the following claims’ total limits losses: Claim Number Total Limits Loss (Ground-up Loss)