Brosins - Table M Construction Flashcards Preview

CAS Exam 8B > Brosins - Table M Construction > Flashcards

Flashcards in Brosins - Table M Construction Deck (4):
1

Advantages of analysis by vertical slices - Per-risk view

Advantages:
1. Natural approach. The analysis corresponds to the way data is presented
2. Easy to understand. To measure the effect of loss limitation, losses are limited & compared to unlimited losses.
3. Quick way to compute insurance charge for one entry ratio

2

Disadvantages of analysis by vertical slices - Per-risk view

1. Process must be repeated for each entry ratio
2. process becomes cumbersome when dealing with thousands of risk in a sample

3

Advantages of analysis by horizontal slices - Per-layer view

1. method used in practice to construct table M
2. works well when there are many risks

4

Disadvantages of analysis by horizontal slices - Per-layer view

1. More difficult to understand
2. require initial data preparation b/c data is not ordinarily presented this way.