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""" | ||
Clark, "Basics of Reinsurance Pricing," explains the concept of loss sensitive features for working layer | ||
excess treaties. One type of loss sensitive program is the "swing plan" retrospective rating program. Suppose a swing | ||
plan works as follows: | ||
- Retro Premium = (Actual Layer Losses) x 1.25 | ||
- Provisional Rate = 20% of Subject Premium | ||
- Maximum Premium = 30% of Subject Premium | ||
- Minimum Premium = 15% of Subject Premium | ||
- Subject Premium = $20,000,000 | ||
You are given the following distribution of losses: | ||
|Probability|Expected Layer Losses| | ||
=================================== | ||
20% | $1,000,000 | | ||
45% | $4,000,000 | | ||
35% | $7,000,000 | | ||
==================================== | ||
""" | ||
|