IEE: Surplus Allocation to Line
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Calculate the current CY surplus allocation to WC. (Modeled on 2015.Fall #13 & 2014.Spring #13)
| all lines |
notation |
prior CY |
current CY |
| policyholders' surplus |
S |
|
|
| net loss & LAE reserve |
L + LAE |
|
|
| net UEP reserve |
UEP |
|
|
| net EP |
NEP |
|
|
| WC only |
notation |
prior CY |
current CY |
| policyholders' surplus |
SW |
---- |
? |
| net loss & LAE reserve |
(L + LAE)W |
|
|
| net UEP reserve |
UEPW |
|
|
| net EP |
NEPW |
|
|
Surplus Ratio
Calculate the Surplus Ratio (SR) using the All Lines data.
SR = m(S) / [ m(L) + m(LAE) + m(UEP) + NEPCY ].
Allocation
Use the Surplus Ratio calculated above to allocate the 'All Lines' surplus to WC.
SW = SR x [ m(LW) + m(LAEW) + m(UEPW) + NEPW(CY) ].
Solution:
| surplus allocation to WC |
12345 |
| surplus ratio |
27.1 |
