CAS Exam 5 Fall 2016, Question 25
Study guide: Exam 5
Given the following information:
Reported Claims Only ($) as of (months):
| Accident Year | 12 | 24 | 36 |
|---|---|---|---|
| 2013 | 6,000 | 9,000 | 10,500 |
| 2014 | 7,500 | 11,250 | |
| 2015 | 9,000 |
Reported ALAE ($) as of (months):
| Accident Year | 12 | 24 | 36 |
|---|---|---|---|
| 2013 | 150 | 900 | 1,575 |
| 2014 | 300 | 1,125 | |
| 2015 | 525 |
- The 36 to ultimate development factor for reported claims only is 1.143.
Part a (0.75 points)
Use the reported development technique to calculate ultimate claims only for all accident years.
Part b (0.5 points)
Evaluate the reasonableness of combining the reported claims only and reported ALAE provided above to estimate total unpaid liabilities.
Part c (0.5 points)
Assess the appropriateness of applying the development technique to the reported ALAE data provided above.
Answer this question and see the worked solution