[[Actuarial Notes Wiki|Wiki]] / **Exam 8 (CAS)** ## Exam 8 (CAS) The **Advanced Ratemaking (Exam 8)** is a 4 hour exam covering classification ratemaking models and excess, deductible, and individual risk rating systems. <div class="callout-cols-2"> > [!answer]- 📅 Exam Schedule {2026} > > <div class="highlight-upcoming" data-date-col="0"></div> > > Dates | Exam > -|- > Apr 14 - Apr 21 | 8 > Oct 19 - Oct 27 | 8 > > - [Register](https://www.casact.org/exams-admissions/exam-registration) ($850 USD registration fee) > [!answer]- 📄 Download Resources {1 PDF} > - [Exam 8 Content Outline](https://www.casact.org/exam/exam-8-advanced-ratemaking) </div> >[!answer]- 📕 Source Material {11 Sources} > > | Source | Tasks | > | --- | --- | > | [[Actuarial Standard of Practice No. 12 Risk Classification (ASB - 2005)]] | A2 | > | [[Distributions for Actuaries (Bahnemann)]] | B1-B3 | > | [[An Actuarial Note on the Credibility of Experience of a Single Private Passenger Car (Bailey and Simon - 1959)]] | A2-A4 | > | [[Using Multi-Dimensional Credibility to Estimate Class Frequency Vectors (Couret and Venter - 2008)]] | A2-A4 | > | [[Individual Risk Rating Study Note (Fisher et al. - 2019)]] | B1-B6 | > | [[Individual Risk Rating Case Study (Fisher et al.)]] | B1-B6 | > | [[Generalized Linear Models for Insurance Rating (Goldburd et al.)]] | A1, A4-A8 | > | [[CGL Experience and Schedule Rating Plan (ISO)]] | B5-B6 | > | [[An Example of Credibility and Shifting Risk Parameters (Mahler - 1990)]] | A2, A4 | > | [[Experience Rating Plan Manual (NCCI - 2003)]] | B5-B6 | > | [[Retrospective Rating Plan Manual (NCCI - 2022)]] | B4, B6 | ### Learning Objectives > [!example]- A. Classification Ratemaking {60-80%} > ### A. Classification Ratemaking > Candidates are expected to go beyond mechanical construction to the comparison and evaluation of alternative [[Classification Ratemaking]] schemes. > 1. Interpret classification ratemaking models (e.g., [[GLM]]). > 2. Evaluate the validity of [[Rate Classes]]. > 3. Measure statistical significance of rate classes including estimates of [[Loss Costs]] of rate classes. > 4. Measure and assess [[Model Fit]] (e.g., use results for a rating plan). > 5. Evaluate classification ratemaking models (e.g., benchmark, recalibrate variables, implementation). > 6. Describe approaches to stripping out [[Rating Factors]] using [[Predictive Models]] for further analysis (e.g., territorial). > 7. Describe approaches to modeling with high dimensional variables (e.g., vehicle make and model, workers compensation classes). > 8. Evaluate combinations of ratemaking component models (e.g., [[Frequency-Severity Models|frequency/severity]]). > > **Readings:** Actuarial Standard of Practice No. 12 · Bailey and Simon · Couret and Venter · Generalized Linear Models for Insurance Rating · Mahler > [!example]- B. Excess, Deductible, and Individual Risk Rating {20-40%} > ### B. Excess, Deductible, and Individual Risk Rating > Candidates will be able to design and manage excess, deductible, and individual risk rating systems, covering three areas: > - **[[Excess and Deductible Rating]]**: Apply general knowledge of excess coverages and the problems inherent in pricing these coverages for different lines of business. > - **[[Experience Rating]]**: Adjust an individual risk's rate to reflect the extent to which that risk's own experience identifies it as being different from other risks in the same class. > - **[[Retrospective Rating|Retrospective and Loss Sensitive Rating]]**: Make adjustments to individual risk premium after policy expiration in response to actual loss and expenses associated with the policy. > > 1. Estimate [[Aggregate Loss Distributions]]. > 2. Determine expected losses by layer of insurance by applying [[Frequency]] and [[Severity]] distributions. > 3. Calculate the cost of the layer of risk given the overall [[Loss Cost]]. > 4. Analyze a [[Loss Sensitive Rating]] plan (e.g., [[Retrospective Rating]]). > 5. Analyze an [[Experience Rating]] plan. > 6. Assess the effectiveness of rating plans. > > **Readings:** Distributions for Actuaries · Individual Risk Rating Study Note · Individual Risk Rating Case Study · CGL Experience and Schedule Rating Plan · Experience Rating Plan Manual · Retrospective Rating Plan Manual