CAS Exam 5 Spring 2015, Question 18
Study guide: Exam 5
A hospital system self-insures its professional liability exposure. The following information is given:
| Accident Year | Reported Claims ($000s) as of 12 months | 24 months | 36 months |
|---|---|---|---|
| 2012 | 2,750 | 6,200 | 7,750 |
| 2013 | 2,950 | 6,600 | |
| 2014 | 3,850 |
| Calendar Year | Average Occupied Beds and Outpatient Visits |
|---|---|
| 2012 | 520 |
| 2013 | 530 |
| 2014 | 540 |
- The expected average occupied beds and outpatient visits for 2015 = 575.
- The pure premium trend = 4.0%.
- The 36 to ultimate reported claims development factor = 1.05.
Estimate ultimate claims for the 2015 accident year using the expected claims technique and justify the expected pure premium selection.
Part a (2.25 points)
Answer this question and see the worked solution