Formulas Flashcards
(4 cards)
1
Q
What is the loss ratio formula?
A
calculated by dividing the Total Losses by the Earned
Premium and multiply by 100 (expressed as a percentage)
2
Q
What is the ‘Total Losses’ formula?
A
the losses paid in the current year plus the reserve for
outstanding losses at the end of the current year.
3
Q
What is the ‘Earned Premium’ formula?
A
the premium income of the current year plus the
premium reserve from the preceding year less the premium reserve for the
current year
4
Q
Index calculations
A
(1.) Payment x base date/payment date = adjusted payment value. (2.) deductible x payment/adjusted payment value = adjusted deductible.
(3.) Actual payment - adjusted deductible = Recoveries
