Preview Questions Actuary | Role Specific Skill

Question 1: How do "Experience Rating" and "Prospective Rating" differ in pricing health insurance products, and what are the advantages of each method?

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Prospective rating is always less accurate than experience rating

Experience rating should always be preferred over prospective rating

Experience rating is used only in group policies, while prospective rating applies to individual policies

Experience rating adjusts premiums based on an individual policyholder's claims history, while prospective rating is based on projected future claims

Question 2: The Cox proportional hazards model is primarily used for:

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Estimating the hazard function in survival analysis, accounting for multiple covariates

Modeling the relationship between independent variables in linear regression

Estimating the parameters of a time-series model

Fitting a distribution to actuarial data

Question 3: If the claims severity data follows a log-normal distribution with a mean of 2, and the variance is 0.5, what would be the expected claim severity?

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2.5

e^2

3.1

2

Question 4: In the context of portfolio risk management, which of the following is an example of systematic risk?

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Credit risk

Operational risk

Interest rate risk

Market risk

Question 5: What is "Dynamic Pricing," and how do you apply it in insurance product pricing to reflect market conditions, competition, and customer behavior?

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Dynamic pricing is irrelevant and should not be used in the insurance industry

Dynamic pricing complicates pricing models and should be avoided

Dynamic pricing adjusts premiums in real-time based on external factors such as competition, claims data, and customer behavior

Dynamic pricing is only applicable to auto insurance, not life insurance

Question 6: Which statistical test is most appropriate for comparing the means of two independent groups in an actuarial context?

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Paired t-test

One-sample t-test

Two-sample t-test

Chi-square test