You are given the following information: All policies have 12 months terms. The effective date is proposed to be 01/10/2019 and it will be in effect for 12 months. There are premium rate changes during 01/07/2017 with a decrement of 4% and during 01/01/2019 with an increment of 5%. (b) (c) (d) Premium trending factor is set to be 1%. Calendar/Accident Year 2017 2018 2015 2016 2017 Earned Premium 1.40 1.40 1.40 1.40 1.30 1.30 1.30 $600,000 $650,000 Given the Case Incurred Loss and ALAE Link Ratios as table below: Accident 12-24 24-36 36-48 Year months months months 2011 2012 2013 2014 1.07 1.07 1.07 1.07 1.15 1.15 Case Incurred Losses and ALAE 1.05 1.05 1.05 1.05 1.05 $250,000 $350,000 48-60 months 1.03 1.03 1.03 1.03 Given tail development factor beyond 72 months is 1.01. Selected annual frequency trend is -2% and selected annual severity trend is 5%. ULAE is set to be 4% of ultimate loss and ALAE consistently. Projected fixed expense provision is 10% and variable expense provision is 20%. Profit and contingencies provision is set to be 3% of premium. (a) Calculate the 2017 and 2018 projected calendar year earned premium at current rate level. 60-72 months 1.02 1.02 1.02 Calculate the 2017 and 2018 projected calendar accident year losses and LAE. Select 12-month and 24-month age to ultimate factors. Briefly explain your selection. Calculate the indicated rate change, giving 40% weight to calendar accident year 2017 and 60% weight to calendar accident year 2018.