Question: 4. Using the data below calculate the total loss ratio for 2006 and explain the change in total loss ratio between 2005 and 2006. Show

4. Using the data below calculate the total loss ratio for 2006 and explain the change in total loss ratio between 2005 and 2006. Show your work.
Territory 2005 Earned Premium Distribution LR for Acc Year Ending 2005 2006 Earned Premium Distribution LR for Acc Year Ending 2006
1 15% 0.8830 15% 0.8750
2 35% 0.9420 50% 0.9380
3 25% 0.8360 20% 0.8340
4 25% 0.8280 15% 0.8250
TOTAL 100% 0.8782 100% ?
LR = Loss Ratio= Losses/Premium.
Losses = LR * Premium

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