CAS Exam 5 Spring 2016, Question 16
Study guide: Exam 5
Given the following as of December 31, 2015:
| Accident Year | Cumulative Paid Claims | Paid Development Technique Ultimate Claims | Paid Development Technique Age-to-Ultimate Factor |
|---|---|---|---|
| 2012 | $600 | $720 | Not Provided |
| 2013 | $500 | $625 | Not Provided |
| 2014 | Not Provided | Not Provided | 2.00 |
| 2015 | $150 | Not Provided | 3.75 |
- Accident year 2015 reported claims = $350.
- Expected claim ratio = 65.0%.
- Calendar year 2015 earned premium = $700.
Part a (0.75 points)
Calculate the following for accident year 2015:
i. Case outstanding ii. IBNR using the expected claims technique iii. Total unpaid claim estimate using the expected claims technique
Part b (1 point)
Upon review, the 36-48 age-to-age claims development factor was corrected to be 1.4. Calculate the revised accident year 2015 ultimate claims using the correct factor and the paid development technique.
Part c (0.5 points)
Calculate the accident year 2015 ultimate claims using the paid Bornhuetter-Ferguson technique and the corrected age-to-age claims development factor in part b. above.
Answer this question and see the worked solution
Concepts tested
- Development Factor
- Accident Year
- Earned Premium
- Calendar Year
- Expected Loss Method
- Chain Ladder Method
- Bornhuetter-Ferguson Method
- Claim Reserve