CAS Exam 5 Spring 2015, Question 19
Study guide: Exam 5
The following information is provided for an unpaid claims analysis with data evaluated as of June 30, 2014.
| Accident Year | Paid Claims | Reported Claims | Paid Development Technique | Reported Development Technique | Paid Bornhuetter-Ferguson Technique | Selected Ultimate Claims |
|---|---|---|---|---|---|---|
| 2012 | 7.0 | 7.8 | 14.0 | 10.9 | 12.0 | 13.8 |
| 2013 | 3.1 | 5.0 | 8.7 | 11.0 | 9.5 | 10.2 |
| 2014 | 1.5 | 1.9 | 12.0 | 5.7 | 10.3 | 7.1 |
- All figures are in millions of dollars.
- The a priori ultimate claims estimate is the same for all accident years.
- There is no development of claims after 48 months.
Part a (1 point)
Estimate ultimate claims for each accident year using the reported Bornhuetter-Ferguson technique.
Part b (1.5 points)
Discuss the appropriateness of the selected ultimate claims for each accident year.
Part c (0.25 points)
Estimate ultimate claims for accident year 2014 using one iteration of the reported Benktander technique.
Part d (0.5 points)
Explain how the unpaid claim estimate for accident year 2014 will change during successive iterations of the reported Benktander technique.
Answer this question and see the worked solution
Concepts tested
- Bornhuetter-Ferguson Method
- Accident Year
- Unpaid Claims
- Credibility
- Benktander Method
- Reasonableness Testing