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All policies are annual and the rate level is reviewed annually .The rate change takes effect on January 1, 2013 The unlimited annual loss frequency
All policies are annual and the rate level is reviewed annually .The rate change takes effect on January 1, 2013 The unlimited annual loss frequency trend equals-1%. The unlimited annual loss severity trend equals +5%. The annual average written premium trend per exposure equals 0%. Assume that exposure are inflation sensitive The annual exposure trend equals +1% Calendar On-Level Accident Reported Losses Reported Losses Excess Unlimited loss as of December of S 1 Million as of December 31,2012 (S) Factor 9 Earned Development Premium (S) 31,2012 (S) 34,054 44,617 41,086 39,025 45,646 36,383 38,487 36,799 38,608 45,295 400,000 60,612 61,941 66,893 67,092 65,960 65,037 65,242 67,732 69.450 67,213 657,172 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.03 1.08 1.20 N/A 456 4,888 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Total 8,774 8,134 2,002 9,000 40,000 For accident year 2012, determine the trended ultimate loss ratio to use in the January 1,2013 rate level analysis incorporating a large-loss adjustment for claims above S1 million. All policies are annual and the rate level is reviewed annually .The rate change takes effect on January 1, 2013 The unlimited annual loss frequency trend equals-1%. The unlimited annual loss severity trend equals +5%. The annual average written premium trend per exposure equals 0%. Assume that exposure are inflation sensitive The annual exposure trend equals +1% Calendar On-Level Accident Reported Losses Reported Losses Excess Unlimited loss as of December of S 1 Million as of December 31,2012 (S) Factor 9 Earned Development Premium (S) 31,2012 (S) 34,054 44,617 41,086 39,025 45,646 36,383 38,487 36,799 38,608 45,295 400,000 60,612 61,941 66,893 67,092 65,960 65,037 65,242 67,732 69.450 67,213 657,172 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.03 1.08 1.20 N/A 456 4,888 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Total 8,774 8,134 2,002 9,000 40,000 For accident year 2012, determine the trended ultimate loss ratio to use in the January 1,2013 rate level analysis incorporating a large-loss adjustment for claims above S1 million
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