CAS Exam 5 Fall 2013, Question 14
Study guide: Exam 5
Given the following information:
| Claim ID | Accident Date | Report Date | CY 2010 | CY 2011 | CY 2012 |
|---|---|---|---|---|---|
| 1 | June 15, 2010 | July 1, 2010 | $100 | $400 | $0 |
| 2 | December 15, 2010 | January 15, 2011 | $0 | $300 | $150 |
| 3 | April 1, 2011 | May 1, 2011 | $200 | $200 | |
| 4 | November 15, 2011 | January 1, 2012 | $0 | $500 | |
| 5 | April 1, 2012 | May 1, 2012 | $200 |
(Incremental payments by calendar year)
Part a (0.5 points)
Construct an annual incremental accident year paid loss triangle as of December 31, 2012.
Part b (0.5 points)
Construct an annual cumulative report year paid loss triangle as of December 31, 2012.
Part c (0.5 points)
Assess whether an accident year approach or a report year approach is more appropriate for reserving auto liability insurance.
Part d (0.5 points)
Assess whether annual or quarterly triangles are more appropriate for a small company selling a long-tailed line of business.
Answer this question and see the worked solution