Ground up losses - ASM 11th edition

[Bballry1234]

I know that ground up losses means the total losses before any deductibles, etc.

However, it seems that in a lot of the ASM exercises, sometimes the deductible gets taken off, and other times it gets added back on. I'm currently working on Max Liklihood Estimators (and other related problems), and it seems that for an exponential it just wants sum(xi-d)/n where xi= value, d=deductible(trunc. point) and n is the number of uncensored observations. Yet, for a Pareto, it seems to add the deductible back to the loss rather than subract it off like in the exponential (Look at problems 33.4-33.6 in the 11th edition of the ASM for a reference of what I am talking about).

Can someone please clarify? My assumption is that for ground up you always add the deductible back for anything that isn't exponential, but you can subtract the deductible for exponential because it is memoryless? However, if someone well-versed could confirm....

[rahim]

you have jumped from p fm to C :smiloe: as far as i remember i was at the same stage as urz . gave p fm first but then mfe and mlc .. em too working on C ryt now.. learned almost everything in uni courses so just left with samples .. how about you .. u think its tough or hectic ?

[Bballry1234]

I've taken MFE too, but I'm still waiting for the result. I'm finding C annoying more than anything. Everything is so technical and nit-picky, and just when you figure something out you have to re-do it for censored and truncated data.

[rahim]

ya thats what sampling is all about ... doing things again and again .. btw r u doing job or in college?

[Bballry1234]

Just got done with school (BS in math), and I got a job at a insurance company. It's going pretty well so far ( It was nice having someone pay for my C exam )

How about yourself?

[rahim]

:laugh: ya dats feels good indeed .. i got offered too in the middle of my BS but i decided to complete it first .. i get more time and similar mathematical stuff for soa papers in college as compared to someone at job .. dats a plus point of BS too :smiloe:

[rahim]

btw have u learned for FAP yet or got VEE credits from ur BS?

[Abraham Weishaus]

I know that ground up losses means the total losses before any deductibles, etc.

However, it seems that in a lot of the ASM exercises, sometimes the deductible gets taken off, and other times it gets added back on. I'm currently working on Max Liklihood Estimators (and other related problems), and it seems that for an exponential it just wants sum(xi-d)/n where xi= value, d=deductible(trunc. point) and n is the number of uncensored observations. Yet, for a Pareto, it seems to add the deductible back to the loss rather than subract it off like in the exponential (Look at problems 33.4-33.6 in the 11th edition of the ASM for a reference of what I am talking about).

Can someone please clarify? My assumption is that for ground up you always add the deductible back for anything that isn't exponential, but you can subtract the deductible for exponential because it is memoryless? However, if someone well-versed could confirm....

Did you account for the fact that 33.4-5 give you losses and 33.6 gives you payments?