Fisher.Visualization
Reading: Fisher, G. et al, "Individual Risk Study Note," CAS Study Note, Version 3, October 2019. Chapter 3. Section 2
Synopsis: To follow...
Study Tips
...your insights... To follow...
Estimated study time: x mins, or y hrs, or n1-n2 days, or 1 week,... (not including subsequent review time)
BattleTable
Based on past exams, the main things you need to know (in rough order of importance) are:
- fact A...
- fact B...
reference part (a) part (b) part (c) part (d) E (2018.Spring #1) E (2018.Spring #1) E (2018.Spring #1) E (2018.Spring #1) E (2018.Spring #1) E (2018.Spring #1) E (2018.Spring #1) E (2018.Spring #1)
In Plain English!
When working with per-occurrence limits and aggregate limits it can be helpful to visualize them. A widely used approach to visualizing them was developed in a paper by Yoong-Sin Lee [1].
Alice: "Lee's paper isn't on the syllabus itself, but sometimes with tricky material it helps to refer to the original source."
The graphs described in the paper are usually referred to as "Lee diagrams". A Lee Diagram has the cumulative claims (count or percentage of loss distribution) on the horizontal axis, and the severity or aggregate loss (the "size") on the vertical axis. Let's look at this in more detail.
Let n be the number of losses, let the loss sizes be x1, ..., xk and assume they're ordered such that x1 < x2 < ... < xk. Let the associated loss frequencies be given by n1, ..., nk thus n = n1 + ... + nk.