AIDA 182 (Latest 2023/ 2024 Update) Risk and Insurance Analysis Techniques Exam | Questions and Verified Answers| 100% Correct| Grade A
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Course
AIDA 182
Institution
AIDA 182
AIDA 182 (Latest 2023/ 2024 Update)
Risk and Insurance Analysis
Techniques Exam | Questions and
Verified Answers| 100% Correct|
Grade A
percentage method (IBNR) - ANS-uses historical relationships
between IBNR reserves and reported losses to develop
percentages that are used in IBNR f...
AIDA 182 (Latest 2023/ 2024 Update)
Risk and Insurance Analysis
Techniques Exam | Questions and
Verified Answers| 100% Correct|
Grade A
percentage method (IBNR) - ANS-uses historical relationships
between IBNR reserves and reported losses to develop
percentages that are used in IBNR forecasts
loss triangle method (IBNR) - ANS-uses historical loss data to
calculate loss development factors to estimate IBNR reserves
allocated loss adjustment expense (ALAE) - ANS-The expense an
insurer incurs to investigate, defend, and settle claims that are
associated with a specific claim.
Unallocated loss adjustment expense (ULAE) - ANS-Loss
adjustment expense that cannot be readily associated with a
specific claim.
Bornhuetter-Ferguson method - ANS-estimates the incurred
but not reported (IBNR) reserve using expected losses and an
IBNR factor rather than depending on judgmental weights
rate - ANS-The price per exposure unit for insurance coverage
,ratemaking - ANS-The process insurers use to calculate
insurance rates, which are a premium component.
indication - ANS-in a rate filing, the amount that the loss
experience suggests that the insurer should charge to cover
costs
insurance rate - ANS-prospective loss costs + expenses + profit
and contingencies
loss costs - ANS-The portion of the rate that covers projected
claim payments and loss adjusting expenses.
premium - ANS-The price of the insurance coverage provided
for a specified period
pure premium - ANS-the average amount of money an insurer
must charge per exposure unit in order to be able to cover the
total anticipated losses for that line of business
expense provision - ANS-The amount that is included in an
insurance rate to cover the insurer's expenses and that might
include loss adjustment expenses but that excludes investment
expenses
underwriting profit - ANS-income an insurer earns from
premiums paid by policyholders minus incurred losses and
underwriting expenses
, incurred losses - ANS-The sum of the paid losses and loss
reserves and loss adjustment expense reserves
loss reserve - ANS-An estimate of the amount of money the
insurer expects to pay in the future for losses that have already
occurred and been reported, but are not yet settled.
pure risk - ANS-A chance of loss or no loss, but no chance of
gain.
speculative risk - ANS-a chance of loss, no loss, or gain
price risk - ANS-Uncertainty over cash flows resulting from
possible changes in the cost of raw materials and other inputs
(such as lumber, gas, or electricity), as well as cost-related
changes in the market for completed products and other
outputs
credit risk - ANS-The risk that customers or other creditors will
fail to make promised payments as they come due
subjective risk - ANS-The perceived amount of risk based on an
individual's or organization's opinion.
objective risk - ANS-the measurable variation in uncertain
outcomes based on facts and data
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