CAS Exam 5 Fall 2014, Question 22
Study guide: Exam 5
The following information is available for accident year 2013 as of December 31, 2013:
- Selected ultimate claims = $5,000.
- Reported claims = $3,000.
- Selected cumulative development factor at 12 months = 6.67.
- Selected cumulative development factor at 24 months = 2.86.
Part a (1.25 points)
Calculate cumulative expected reported claims as of July 31, 2014, using linear interpolation.
Part b (0.5 points)
Describe why linear interpolation may not be appropriate for estimating the expected reported claims for an immature accident year.
Answer this question and see the worked solution