Fisher.TableL
Reading: Fisher, G. et al, "Individual Risk Study Note," CAS Study Note, Version 3, October 2019. Chapter 3. Section 5
Synopsis: To follow...
Study Tips
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Estimated study time: 3 hours (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!
A (California) Table L is used to estimate the per-occurrence charge and aggregate excess charge together in a single table. The entries in a Table L are organized by policy size, entry ratio and per-occurrence limit (deductible). The Table L entry ratio is defined as [math]r=\frac{\mbox{actual }{\color{red}\textbf{limited}}\mbox{ aggregate losses}}{\mbox{expected }{\color{red}\textbf{unlimited}} \mbox{ aggregate losses}}[/math]. Note that in the entry ratio for a Limited Table M both the numerator and denominator were limited.
The Table L insurance charge at entry ratio r is denoted by [math]\phi_D^\star (r)[/math] and is the average difference between a risk's actual unlimited loss and its actual loss limited to D plus the limited loss greater than [math]r\cdot E[/math]. Here E is the unlimited expected loss. The superscript * and subscript D tells us the entry ratio is for a Table L with per-occurrence limit D.
The Table L insurance savings, [math]\psi^\star_D(r)[/math], is the average amount by which the risk's actual limited loss is less than [math]r\cdot E[/math]. The Table L insurance charge and insurance savings are a ratio to expected unlimited loss. This means the loss cost is given by [math]\phi^\star_D(r)\cdot E[/math].