CAS Exam 5 Fall 2016, Question 17

Study guide: Exam 5

(2 points)

Actuary A and Actuary B are each performing a reserve analysis for a small insurance company. To enhance credibility:

• Actuary A relies only on internal data, aggregated across all lines of business.
• Actuary B supplements internal data with industry data separately by line of business.

Describe the benefits and deficiencies of each of these two strategies.

Part a (2 points)

Answer this question and see the worked solution

Concepts tested

• Reserving Data Organization
• Credibility
• Mix of Business
• Data Segmentation
• External Information in Reserving

More questions from this set

• CAS Exam 5 Fall 2016, Question 16
• CAS Exam 5 Fall 2016, Question 18