General Exam Strategy
- Execution Order: Start with calculation-based questions to lock in the methodology before tackling qualitative/theory questions.
- Identify Question Intent: Break down complex or unfamiliar theory prompts by highlighting the purpose and action items to ensure every sub-question is answered.
- Question Wording:
- “What should happen if…” Recommending a solution.
- “What would happen if…” Explaining the consequences.
Ratemaking & On-Leveling
- On-Level Diagram: Always draw the parallelogram diagram for the parallelogram method. This helps prevent errors on subsequent calculation steps.
- Double-check on-level calculations at the end. Correcting formulas at the end will flow through and fix the entire solution.
- Written Premium: Written premium is straightforward to on-level when there are no law changes.
- Granularity of Data: Do not feel obligated to use the most granular data provided unless explicitly instructed.
- Example: If quarterly average premiums are provided but you have already calculated on-leveled premium and exposure, use the on-leveled premium instead of on-leveling quarterly data.
- Fixed Expense (FE) Ratio: You can trend the FE ratio by average accident date without a significant loss of accuracy to save time.
Key Technical Reminders
- Workers’ Compensation: Review D_Workers Compensation for domain-specific details not found in the main study manual.
- Formula Checking: When copying formulas (especially with hardcoded values like trend periods), verify and update the constants for subsequent calendar years.
- Credit vs. Charge: Remember that a Credit is “good for the insured” (i.e., a discount).
- Berquist-Sherman: There are no incremental triangles used in the Berquist-Sherman Technique; always use cumulative triangles.