CAS Exam 5 Fall 2016, Question 23
Study guide: Exam 5
(2.75 points)
Given the following information as of December 31, 2015:
Case Outstanding ($) as of (months):
| Accident Year | 12 | 24 | 36 | 48 |
|---|---|---|---|---|
| 2012 | 3,970 | 4,115 | 2,730 | 1,347 |
| 2013 | 3,680 | 3,760 | 4,560 | |
| 2014 | 3,690 | 7,380 | ||
| 2015 | 6,230 |
Paid Claims ($) as of (months):
| Accident Year | 12 | 24 | 36 | 48 |
|---|---|---|---|---|
| 2012 | 3,680 | 7,360 | 11,040 | 13,800 |
| 2013 | 3,520 | 7,040 | 10,560 | |
| 2014 | 3,360 | 6,720 | ||
| 2015 | 3,520 |
Open Claim Counts as of (months):
| Accident Year | 12 | 24 | 36 | 48 |
|---|---|---|---|---|
| 2012 | 238 | 245 | 171 | 63 |
| 2013 | 222 | 230 | 179 | |
| 2014 | 220 | 255 | ||
| 2015 | 270 |
| Calendar Year | Written Premium |
|---|---|
| 2014 | $34,500 |
| 2015 | $37,500 |
- Annual severity trend = 10.0%.
- Claims are fully developed by 48 months.
- Accident year 2015 initial expected claim ratio = 65.0%.
- Policies are annual, and are written uniformly throughout the year.
- There have been no rate changes since 2013.
- There is no premium trend.
Calculate the unpaid claims for accident year 2015 using the reported Bornhuetter-Ferguson technique adjusting for the change in case reserve adequacy.
Part a (2.75 points)
Answer this question and see the worked solution