FSA courses

GI 101

Ratemaking and Reserving

2 discussions

Explanation

GI 101: Development and BF place different weight on emerging claims

Development extrapolates observed experience, while BF combines it with an expected unreported component. Data maturity and the expected-loss assumption drive how differently the methods react.

Original practice scenario

Expected ultimate is 2m, reported fraction .40 and reported claims .9m. Development ultimate is 2.25m; BF ultimate is .9m+2m×.60=2.1m. Explain both assumptions and repeat with reported claims .6m. A comparison should assess applicability, not average the answers automatically.

Study check

Write the assumptions, the decision being supported and one limitation. Use the current course syllabus for the required terminology and scope; this introductory guide is not a complete course summary.

Reading sources

Official syllabus and resources

ActNet editorial guide · October 1, 2026 · Original illustrative examples.

0 repliesOct 1

Explanation

GI 101: On-level premium and prospective losses need a common period

A ratemaking exercise compares future costs with premium on a defined basis. Development, trend and on-levelling each address a different mismatch. Label the experience and prospective periods before calculating.

Original practice scenario

Use original premium 1m and ultimate historical losses .7m. Adjust premium for a stated rate-level change and losses for a stated future trend, separately. Explain why changing only premium or only losses would leave the comparison inconsistent.

Study check

Reading sources

Official syllabus and resources

ActNet editorial guide · October 1, 2026 · Original illustrative examples.

0 repliesOct 1