Calculate with the method of the cost of losses and with the method of the index of losses the new premium of the basic category (base risk), when the current one is 160 and the adjusted loss ratio is 69 It is given Category Final losses Risk exposure units Valid differential Accrued premiums I 1 750 000 13 000 0 93 1 700 000 II 1 600 000 10 000 1 08 1 250 000 III 1 400 000 8 000 1 00 1 120 500 b) The rate adjustments that affect the historical experience period are as follows 1) Change of total average rate on 01 07 2016 by 8 2) Change of total average rate on 01 07 2017 by 13 A legal amendment imposes increases by 3 on 01 01 2017 and by 4 on 01 01 2018 in the individual premiums of all insurance policies (including those already in force) Calculate the adjustment factor for the calendar year 2017

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Sep 04, 2024

Calculate with the method of the cost of losses and with the method of the index of losses the new premium of the basic category

Calculate with the method of the cost of losses and with the method of the index of losses the new premium of the basic category (base risk), when the current one is 160 and the adjusted loss ratio is 69%. It is given

Category	Final losses	Risk exposure units	Valid differential	Accrued premiums
I	1.750.000	13.000	0.93	1.700.000
II	1.600.000	10.000	1.08	1.250.000
III	1.400.000	8.000	1.00	1.120.500

b) The rate adjustments that affect the historical experience period are as follows: 1) Change of total average rate on 01/07/2016 by 8%. 2) Change of total average rate on 01/07/2017 by 13%.

A legal amendment imposes increases by 3% on 01/01/2017 and by 4% on 01/01/2018 in the individual premiums of all insurance policies (including those already in force). Calculate the adjustment factor for the calendar year 2017.