CAS Exam 5 Fall 2013, Question 24
Study guide: Exam 5
Given the following information:
| Accident Year | Selected Ultimate Claims as of 12/31/2011 | Actual Reported Claims as of 12/31/2011 | Actual Reported Claims as of 12/31/2012 |
|---|---|---|---|
| 2009 | $5,000 | $5,000 | $5,500 |
| 2010 | $5,000 | $3,333 | $5,033 |
| 2011 | $5,000 | $2,500 | $4,000 |
The selected ultimate claims as of December 31, 2011 were determined using the reported development technique.
Part a (1.25 points)
For accident years 2009 through 2011, compare actual claim emergence to expected reported claim emergence between December 31, 2011 and December 31, 2012.
Part b (0.25 points)
Briefly discuss what change, if any, the actuary should make to the reported claim development factors based on the actual claim emergence as of December 31, 2012.
Part c (1.5 points)
For each accident year, justify what changes, if any, the actuary should make to the ultimate claim selections based on the actual claim emergence as of December 31, 2012.
Answer this question and see the worked solution