Can anyone help me understand why we remove (c-1)*E from the basic premium factor?
I'm assuming it's because the expense provision (e) already includes LAE and we're removing it here so it's not double counted when applying the LCF to actual losses over the policy term.
I'm assuming it's because the expense provision (e) already includes LAE and we're removing it here so it's not double counted when applying the LCF to actual losses over the policy term.
Basic Premium Factor in LRARO Policies
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