CAS Exam 5 Spring 2016, Question 14
Study guide: Exam 5
Given the following data evaluated as of December 31, 2015:
Company Data — Cumulative Paid Claims ($000) as of (months):
| Accident Year | 12 | 24 | 36 | 48 |
|---|---|---|---|---|
| 2012 | 850 | 950 | 1,950 | 2,450 |
| 2013 | 700 | 2,200 | 3,300 | |
| 2014 | 900 | 1,600 | ||
| 2015 | 1,000 |
Industry Data — Paid Claims Age-to-Age Factors:
| Accident Year | 12-24 | 24-36 | 36-48 |
|---|---|---|---|
| 2012 | 1.97 | 1.24 | 1.10 |
| 2013 | 2.03 | 1.27 | |
| 2014 | 2.03 |
- There is no development after 48 months.
Part a (0.75 points)
Calculate the company's accident year 2015 ultimate claims using the paid claim development technique and the company's historical paid claim activity.
Part b (0.5 points)
Calculate the company's accident year 2015 ultimate claims using the paid claim development technique and the industry claim development factors.
Part c (0.5 points)
Recommend and briefly justify an estimate of the company's accident year 2015 ultimate claims.
Answer this question and see the worked solution
Concepts tested
- Chain Ladder Method
- Development Factor
- Accident Year
- Settlement Rate
- External Information in Reserving