CAS Exam 5 Fall 2016, Question 24
Study guide: Exam 5
Given the following information as of December 31, 2014:
Paid Claims ($) as of (months):
| Accident Year | 12 | 24 | 36 |
|---|---|---|---|
| 2011 | 200 | 560 | 570 |
| 2012 | 150 | 250 | 400 |
| 2013 | 150 | 350 | |
| 2014 | 50 |
Received Salvage and Subrogation ($) as of (months):
| Accident Year | 12 | 24 | 36 |
|---|---|---|---|
| 2011 | 20 | 90 | 100 |
| 2012 | 16 | 40 | 70 |
| 2013 | 15 | 56 | |
| 2014 | 5 |
- Ultimate claims for accident year 2014 = $150.
- There is no development beyond 36 months.
- A simple all-year average is used for all development factors.
Part a (0.75 points)
Estimate the ultimate salvage and subrogation for accident year 2014 using the development technique.
Part b (1.25 points)
Estimate the ultimate salvage and subrogation for accident year 2014 using a ratio approach.
Part c (0.5 points)
Given the following additional information for accident year 2015 as of December 31, 2015:
- Ultimate claims = $175
- Salvage and subrogation received = $12
Recommend and briefly justify an ultimate salvage and subrogation estimate for accident year 2015.
Answer this question and see the worked solution