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  1. Aggregate policy
    • limit to the amt that an insd will need to pay in pol period
    • can use table M to price ded w aggregated ≡ retro rated w per loss limit
  2. Similarities btwn ded + agg & retro
    • infinite ded + agg ≡ retro w max but no per loss limit
    • retro w per loss lim but no max ≡ ded w no agg
  3. Pricing a ded + agg policy
    • price XS & agg loss simultaneously ≡ Table L
    • charge for 2 cpts ≡ ins charge + ELF
  4. Pricing ded + agg w Table MD
    • closer to M than L → no add'l charge for limited losses
    • exp limit losses are used instead of ground up loss
    • need separate table MD for each ded (impacts size of loss dist)
  5. Pricing ded + agg w Table M
    • use lim losses to get ELG
    • calc r = agg / lim
    • LER = ELF / LR → get LGAF & ELG
    • use Table M
  6. Choice of primary loss
    • only have a small impact if r high or ded low
    • otherwise ins charge will be inadequate / excessive
    • $ error greater for large pol low r
    • % error greater for large pol high r
Card Set:
2012-08-15 01:16:49
aggregate policies

Pricing Aggregates on Deductible Policies
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