What is the purpose of the ballast in the NCCI xs formula?
Reaching back here … it’s intended to dampen the impact of the expected and actual losses. Think of k in the credibility formula p / (p+k).
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Have there been any syllabus changes between the Fall 2024 sitting and the Fall 2025 sitting?
The ballast provides stability by limiting the impact of any single loss on the mod
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Thank you both for the explanation and there is another GLM paper on the syllabus. It is on Lasso regression and is as long as the original GLM paper.
Another way that I preferred was that the formula you show is just a re-parameterization of:
[Z_p*A_p + (1-Z_p)E_p + Z_eA_e + (1-Z_e)*E_e] / E
And w and B are given by Z_p = E/(E+B) and w = Z_e/Z_p
So w and B are just different parameterizations of the credibility assigned to the primary & excess layers. Werner Modlin pg 295 covers this - can’t remember if it is in the IRR paper explicitly or not
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I have seen the version that you mentioned before so it makes sense that it was elsewhere on the exams.
I’m looking at the 2024 vs 2025 Content Outlines and don’t see any new readings. On both, the GLM paper is Goldburg et al “Generalized Linear Models for Insurance Rating” Chapters 1-10. When I compare back to the 2023 syllabus, its the same paper but only chapters 1-9. Is the new paper you’re referring to just an additional chapter of the same paper?
Nevermind. I see that the new papers are Holmes & Casotto and ASOP 25. Thanks all!
What’s the recommended order to attack the papers? I’m thinking GLM / Holmes-Castillo, then Fisher, then some order of the rest with liberal amounts of those 3 named sprinkled in for good measure.
After Fisher, I would look at Bailey & Simon, Couret & Venter, then Bahnemann.
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Do we have somewhere around here a primer on the Pearson environment? What to know, what’s different from Excel, functions, workarounds, how much time you should spend getting acquainted with it before you go waltz in to take an exam?
most functions are the same, main thing to know is that hot keys do not work; so no F4 to lock cell references. Also not ctrl+arrow key to go to the end of the selection.
Here is a link to where you can find a list of formulas that work in the pearson environment and their excel and google sheets equivalents. They also have sample questions so that you can get a feel for what it is like to answer questions in the pearson enviorment.
https://home.pearsonvue.com/cas
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