Exam 5: Volume-weighted development factors are ratios of totals
A volume-weighted age-to-age factor gives larger earlier cumulative values more influence. It is not the unweighted mean of individual ratios. Selecting a factor also requires considering distortions, maturity and the intended segment.
Worked example or practice scenario
Two origin years develop from 100 to 150 and from 900 to 990. Their factors are 1.50 and 1.10. The volume-weighted factor is (150+990)/(100+900)=1.14; the simple average is 1.30.
Try this next
Explain the difference before calculating. Then identify a large-loss scenario where volume weighting could be distorted. A mechanical average is an input to a selection, not the entire selection process.
Reading sources
ActNet editorial guide · October 1, 2026 · Original illustrative examples.
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