CAS Exam 5 Spring 2014, Question 18
Study guide: Exam 5
An insurance company has the following claims information as of December 31, 2013:
Cumulative Paid Claims ($000s)
| Accident Year | 12 Months | 24 Months | 36 Months |
|---|---|---|---|
| 2011 | 1,000 | 1,500 | 1,815 |
| 2012 | 1,020 | 1,530 | |
| 2013 | 1,040 |
Cumulative Reported Claims ($000s)
| Accident Year | 12 Months | 24 Months | 36 Months |
|---|---|---|---|
| 2011 | 1,100 | 1,650 | 1,815 |
| 2012 | 1,220 | 1,830 | |
| 2013 | 1,340 |
Case Outstanding Claims ($000s)
| Accident Year | 12 Months | 24 Months | 36 Months |
|---|---|---|---|
| 2011 | 100 | 150 | 0 |
| 2012 | 200 | 300 | |
| 2013 | 300 |
Cumulative Open Claim Counts (as printed)
| Accident Year | 12 Months | 24 Months | 36 Months |
|---|---|---|---|
| 2011 | 1,000 | 1,100 | 1,155 |
| 2012 | 1,000 | 1,100 | |
| 2013 | 1,000 |
Cumulative Closed Claim Counts
| Accident Year | 12 Months | 24 Months | 36 Months |
|---|---|---|---|
| 2011 | 900 | 1,080 | 1,155 |
| 2012 | 900 | 1,080 | |
| 2013 | 900 |
- No development occurs beyond 36 months.
- There are no partial payments.
Estimate ultimate claims for accident year 2013 using two reserving techniques that are consistent with a diagnostic review of the data.
Part a (4 points)
Answer this question and see the worked solution
Concepts tested
- Berquist-Sherman Method
- Accident Year
- Inflation
- Data Diagnostic Analysis
- Chain Ladder Method
- Frequency-Severity Method