It would not have affected the loss ratio method if the Earned premium
at current rates # was correct. Pure premium method would indicate a 2%
decrease.
(562500 + 1500000)/(500 + 1000 * 1.25) = 1178.57
1178.57 / 0.6 = 1964.29
1964.29 / 2000 = .98 or -2%
> ----------
> From: Beth Sweeney[SMTP:bsweeney@amfam.com]
> Sent: Thursday, April 30, 1998 10:40 AM
> To: Studygroup6@lists.casact.org
> Subject: 91 (#62) and 94 (#94)
>
> The MAF Seminar had a problem (#1) after the McClenahan review which
> is
> similar to the above problems. The Casualty Study Manual shows these
> problems after the Finger section. The CSM answer says that a change
> in
> the average class relativity has no impact in the loss ratio
> indication.
>
> The MAF Seminar answer adjusts EP at Current rates based on the
> correct
> Class Relativity. Therefore both the loss ratio method and pure
> premium
> method still yield the same answer.
>
> Does anyone have the CAS model answer for these problems?
>