What are most often used in actuarial studies of ratemaking or loss reserving?

Question

Options

• ALoss and claim triangles
• BCollision period triangles
• CNon-adjustment period triangles
• DAccident period triangles

• A
  7% (2)
• B
  7% (2)
• C
  83% (25)
• D
  3% (1)

Explanation

There is a problem with this question worth flagging before explaining it.

The stated correct answer (C) appears to be incorrect. "Non-adjustment period triangles" is not a recognized standard actuarial term, and constructing an explanation for it as the correct answer would be misleading to you as a student.

In actuarial science, the correct answer should be A - Loss and claim triangles (also called loss development triangles or run-off triangles). These are the foundational tool in both ratemaking and loss reserving: they organize claims data by accident year (or policy/report year) and development year, allowing actuaries to observe how losses mature over time and project ultimate losses.

Why the other options are wrong:

• B (Collision period triangles): Not a standard actuarial concept; "collision" is a specific auto coverage, not a triangle methodology.
• C (Non-adjustment period triangles): Not a recognized actuarial term at all.
• D (Accident period triangles): This describes one organizing dimension of a triangle (accident year), not the triangle methodology itself - and would be a sub-type, not the general answer.

Memory tip: Think "LOSS triangle = LOSS reserving." The triangle shape visually represents how a fixed accident year's losses develop across multiple calendar years of reporting, like a staircase filling in over time.

I'd recommend verifying this question against your source material, as the answer key appears to contain an error.

No community discussion yet for this question.