CAS Exam 5 Fall 2013, Question 18

Study guide: Exam 5

For each scenario described below, justify an appropriate reserving technique for estimating the unpaid claim liabilities at 12 months maturity.

Part a (0.5 points)

Excess of loss reinsurance with an average attachment point of $100 million on product liability policies.

Part b (0.5 points)

Basic limits auto liability for an insurer that has recently implemented a new claims processing system to make faster payments to insureds without changing the company's reserving methodology.

Part c (0.5 points)

Self-insured workers compensation for a large corporation in a state where the statute of limitations for filing a claim has been recently reduced.

Part d (0.5 points)

Property catastrophe coverage in a year with higher-than-expected catastrophe losses reported to the insurer but not yet paid.

Answer this question and see the worked solution

Concepts tested

• Loss Reserving
• Loss Development
• Bornhuetter-Ferguson Method
• Changing Conditions
• Claims Processing Changes

More questions from this set

• CAS Exam 5 Fall 2013, Question 17
• CAS Exam 5 Fall 2013, Question 19