CAS Exam 5 Spring 2016, Question 20
Study guide: Exam 5
Given the following information:
Cumulative Closed Claim Counts as of (months):
| Accident Year | 12 | 24 | 36 | 48 | Estimated Ultimate Claim Count |
|---|---|---|---|---|---|
| 2012 | 3,314 | 4,260 | 4,340 | 4,380 | 4,380 |
| 2013 | 3,390 | 4,404 | 4,550 | 4,596 | |
| 2014 | 3,342 | 4,365 | 4,454 | ||
| 2015 | 3,607 | 4,509 |
| Months | 12 | 24 | 36 | 48 |
|---|---|---|---|---|
| Selected Disposal Rate | 0.800 | 0.980 | 0.990 | 1.000 |
Cumulative Paid Claims ($) as of (months):
| Accident Year | 12 | 24 | 36 | 48 |
|---|---|---|---|---|
| 2012 | 7,760 | 13,664 | 15,515 | 16,484 |
| 2013 | 8,797 | 13,543 | 16,824 | |
| 2014 | 7,821 | 13,928 | ||
| 2015 | 9,113 |
| Accident Year | Parameter ("a";"b") for Two-Point Exponential Fit as of 12 months | 24 | 36 | 48 |
|---|---|---|---|---|
| 2012 | (1,069 ; 0.00060) | (16 ; 0.00159) | (22 ; 0.00151) | |
| 2013 | (2,080 ; 0.00043) | (19 ; 0.00149) | ||
| 2014 | (1,187 ; 0.00056) |
- The relationship between the cumulative number of closed claims ("X") and cumulative paid claims ("Y") is:
Y = ae^{bX}. - The adjusted paid claims for calendar year 2015 are the same as the unadjusted paid claims.
- There is no development after 48 months.
- An all-year volume weighted average is used to calculate claim development factors.
Calculate ultimate claims for accident year 2015 using the Berquist-Sherman paid claim development adjustment.
Part a (2.5 points)
Answer this question and see the worked solution