Hi there, (i) State the two definitions of burning cost premium and show how they are linked. (ii) You have ten years of premium and individual paid claims development data, gross of reinsurance, for a particular product. Explain the steps you would take to analyse and adjust these data for the purpose of reviewing the risk premium for that product. (iii) For a separate project you have claim data for claims reported between 30 September 2006 and 30 September 2007. The average reporting delay is nine months. You are setting the rates for annual policies sold between 1 January 2008 and 30 June 2008. Claims inflation was 3% in 2006, 4% in 2007 and is expected to be 5% in 2008 and 6% in 2009. Using a claim at the mid-point of the periods given, calculate the inflation adjustment needed for the 2008 rating series stating any assumptions made. Would like to ask is this question still relevant to SP7?
No this question is relevant to SP8 and not SP7 as it is about pricing and not reserving or capital modelling. If you look at this post on the forum, it tells you which pre-2010 questions are still relevant for SP7: SP7 FAQ (last updated 18 December 2018) | Actuarial Education (acted.co.uk)
