Exam 5 Details

In this section, we will lay a strong foundation by exploring the fundamental concepts of insurance. We'll start by understanding the fundamental insurance equation and how it applies to policies, coverages, and claims. We will also delve into the interpretation and analysis of insurance data, equipping you with the knowledge to navigate the intricacies of the insurance industry.

Get ready to dive into the fascinating world of ratemaking! In this section, we will guide you through the step-by-step process of determining rates. We'll cover techniques to address anomalies in loss data, make rate and benefit changes, conduct development analyses to estimate future losses, and apply trending methods to account for changes over time. You will also gain insights into the considerations of expenses and profit that shape overall rate level indications.

Identifying and accounting for differences in risk between groups of policyholders is vital when pricing insurance. In this section, we will explore different methods of risk classification. You will learn about traditional approaches, as well as how they can be complemented by multivariate classification techniques. We will also delve into special classification methods tailored to unique risk characteristics. Throughout, we will emphasize the importance of credibility in risk classification.

Now that you have learned the principles of ratemaking, it's time to focus on the practical implementation of rate changes. In this section, we will discuss the various constraints and considerations that come into play when finalizing rates. We'll explore operational, marketing, and regulatory factors that influence decision-making. By the end, you will have the skills to make informed decisions and effectively implement rate changes.

In addition to the core ratemaking process, this section covers some important supplementary topics. We will delve into the unique considerations of claims-made policies and the challenges associated with individual risk rating. By exploring these specialized areas, you will gain a deeper understanding of the broader ratemaking landscape.

Estimating reserves for unpaid claims is a critical aspect of actuarial work. In this section, we will explore various reserving methods. We will learn about the goals of reserving, examine the mechanics of several different methods for estimating ultimate claims, and explore the ways each of those method react to various types of change. By mastering these methods, you will gain the skills to select and apply appropriate reserving techniques.

Reserving isn't just about estimation—it also involves adjusting and evaluating techniques for accuracy and reasonableness. In this section, we will guide you through the process of adjusting claims data for changes in claims handling procedures using the Berquist-Sherman techniques. Additionally, you will develop skills to evaluate the effectiveness of different reserving techniques, ensuring that your estimates align with real-world scenarios.

This section covers additional essential topics related to reserving. We will explore the estimation and evaluation of recoveries, including salvage and subrogation. You will also gain insights into the estimation techniques for unallocated loss adjustment expenses (LAE). By delving into these complex areas of reserving, you will broaden your understanding and be well-prepared for any challenges that may arise.