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9.6. You are to calculate rates effective for the year beginning Jan. 1, 2020 for one-year policies using the loss cost method. You are given the following data: Accident Year Earned Exposure Units Earned Premium Ultimate Losses (Fully Developed) 2017 855 750,015 572,850 2018 886 780,120 564,825 You are also given: (i) Rates are based on a weighted average with weights of 40% on 2017 and 60% on 2018. (ii) Trend is 5%. (iii) The permissible loss ratio is 65%. Calculate the gross rate.

9.6. You are to calculate rates effective for the year beginning Jan. 1, 2020 for one-year policies using the loss cost method. You are given the following data: Accident Year Earned Exposure Units Earned Premium Ultimate Losses (Fully Developed) 2017 855 750,015 572,850 2018 886 780,120 564,825 You are also given: (i) Rates are based on a weighted average with weights of 40% on 2017 and 60% on 2018. (ii) Trend is 5%. (iii) The permissible loss ratio is 65%. Calculate the gross rate.

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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9.6. You are to calculate rates effective for the year beginning Jan. 1, 2020 for one-year policies using the loss cost method. You are given the following data: Accident Year Earned Exposure Units Earned Premium Ultimate Losses (Fully Developed) 2017 855 750,015 572,850 2018 886 780,120 564,825 You are also given: (i) Rates are based on a weighted average with weights of 40% on 2017 and 60% on 2018. (ii) Trend is 5%. (iii) The permissible loss ratio is 65%. Calculate the gross rate.
Transcribed Image Text:9.6. You are to calculate rates effective for the year beginning Jan. 1, 2020 for one-year policies using the loss cost method. You are given the following data: Accident Year Earned Exposure Units Earned Premium Ultimate Losses (Fully Developed) 2017 855 750,015 572,850 2018 886 780,120 564,825 You are also given: (i) Rates are based on a weighted average with weights of 40% on 2017 and 60% on 2018. (ii) Trend is 5%. (iii) The permissible loss ratio is 65%. Calculate the gross rate.
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