CAS Exam 5 study plan
CAS Exam 5 · Give each week a clear focus.
8 weeks · About 7 hours per week
Basic Ratemaking
Map the Basic Ratemaking syllabus into a one-page topic outline covering exposure bases, premium and loss data, and ratemaking components
Define and compute loss ratio, expense ratio, and permissible loss ratio from a given set of income-statement figures
Distinguish written, earned, and in-force premium and explain how each enters a rate-level calculation
Build a formula sheet for rate-level indications using pure premium and loss ratio methods
Your checkpoint
A hand-written formula sheet plus 10 self-authored rate-level problems solved with worked answers checked against the source text
Basic Ratemaking
Compute pure premium indications from aggregated loss and exposure data, including the effect of trend and development adjustments
Apply credibility weighting to a class or territory indication and justify the chosen credibility standard
Explain how expenses, profit, and contingencies are loaded into a final rate and compute a gross rate from a permissible loss ratio
Work through at least 15 calculation problems on rate-level indications under timed conditions
Your checkpoint
A timed 20-problem problem set on rate-level indication scored at 80% or better, with an error log listing each mistake and its cause
Basic Ratemaking
Describe the purpose and mechanics of classification ratemaking and compute a class differential
Explain territory rating, including the use of loss costs and the role of the residual market
Compute increased limits factors and deductible credits and describe when each applies
Identify the data quality issues that distort classification and territorial indications
Your checkpoint
A one-page summary table of rating-plan components (class, territory, increased limits, deductibles) with one worked numerical example per component
Basic Ratemaking
Explain individual risk rating and compute an experience modification using the credibility-weighted actual-to-expected approach
Contrast prospective and retrospective rating and compute a retrospective premium with a loss conversion factor and maximum/minimum
Describe schedule rating and how judgment is constrained in filed rating plans
Re-solve every problem missed in weeks 1 to 3 without notes
Your checkpoint
A closed-book midterm of 25 mixed Basic Ratemaking problems completed in 90 minutes with a written score and a remediation list
Estimating Claim Liabilities
Map the Estimating Claim Liabilities syllabus into a one-page outline covering development methods, expected loss methods, and case reserves
Compute age-to-age development factors and select age-to-ultimate factors from a development triangle
Apply the chain-ladder method to estimate ultimate losses and explain the assumptions it relies on
Distinguish reported versus paid development and describe when each is preferred
Your checkpoint
A fully worked development triangle with selected factors, an ultimate loss estimate, and a paragraph explaining each assumption relied on
Estimating Claim Liabilities
Compute Bornhuetter-Ferguson and expected loss (Benktander) estimates and compare them to chain-ladder on the same data
Explain the role of the a priori loss ratio and how the choice of initial expected losses changes the estimate
Estimate IBNR and describe how case reserves and bulk reserves interact with the IBNR estimate
Diagnose common triangle defects such as negative development, outliers, and changes in case-reserving practice
Your checkpoint
A side-by-side comparison of chain-ladder, Bornhuetter-Ferguson, and expected loss estimates for one triangle, with a written recommendation and justification
Estimating Claim Liabilities & Basic Ratemaking
Describe the role of claim liabilities in ratemaking and explain how a change in the loss reserve estimate flows into a rate indication
Compute a reserve estimate using frequency-severity and explain when it is preferable to development methods
Work mixed problems that require both a reserve estimate and a rate-level indication
Review the Basic Ratemaking formula sheet and rebuild it from memory
Your checkpoint
A rebuilt formula sheet from memory plus five integrated problems linking reserve estimates to rate indications, all solved correctly
Basic Ratemaking & Estimating Claim Liabilities
Complete two full-length timed practice exams under exam conditions and score each
Classify every missed problem by domain and error type and re-solve each one
Drill the 20 highest-risk formulas from both domains until each can be written from memory
Confirm exam-day logistics and finalize a one-page last-review sheet
Your checkpoint
A final error log showing every missed problem resolved, plus a completed one-page last-review sheet covering both domains
Milestones
Week 2: Can compute a rate-level indication by both pure premium and loss ratio methods without notes, and explain the difference in results
Week 4: Scores 80% or better on the closed-book 25-problem Basic Ratemaking midterm
Week 6: Can produce chain-ladder, Bornhuetter-Ferguson, and expected loss estimates from a single triangle and articulate why they differ
Week 8: Scores 70% or better on both full-length timed practice exams with no repeated error type in the final error log