CAS Exam 5 Fall 2015, Question 17
Study guide: Exam 5
Given the following information:
Reported Claims ($000):
| Accident Year | 12 Months | 24 Months | 36 Months | 48 Months |
|---|---|---|---|---|
| 2011 | 722 | 844 | 897 | 942 |
| 2012 | 758 | 898 | 963 | |
| 2013 | 818 | 980 | ||
| 2014 | 931 |
| Calendar Year | On-level Earned Premium ($000) |
|---|---|
| 2011 | 1,300 |
| 2012 | 1,325 |
| 2013 | 1,350 |
| 2014 | 1,375 |
- Annual claims trend = 4%.
- Assume no development beyond 48 months.
Part a (0.75 points)
Calculate the estimated ultimate claims for accident year 2014 using the reported development technique.
Part b (1.5 points)
Calculate the estimated ultimate claims for accident year 2014 using the expected claims technique. Justify the expected loss ratio selection.
Answer this question and see the worked solution
Concepts tested
- Expected Loss Method
- Accident Year
- Earned Premium
- Loss Ratio
- Credibility
- Chain Ladder Method
- Loss Trend