CAS Exam 5 Spring 2017, Question 15
Study guide: Exam 5
Given the following information as of December 31, 2016:
Cumulative Paid Claims ($000) as of (months)
| Accident Year | 12 | 24 | 36 |
|---|---|---|---|
| 2014 | 1,150 | 2,250 | 3,000 |
| 2015 | 1,250 | 2,400 | |
| 2016 | 1,550 |
Cumulative Reported Claims ($000) as of (months)
| Accident Year | 12 | 24 | 36 |
|---|---|---|---|
| 2014 | 5,150 | 7,200 | 8,000 |
| 2015 | 4,800 | 6,700 | |
| 2016 | 4,750 |
Cumulative Reported Claim Counts as of (months)
| Accident Year | 12 | 24 | 36 |
|---|---|---|---|
| 2014 | 102 | 107 | 108 |
| 2015 | 96 | 101 | |
| 2016 | 99 |
Open Claim Counts as of (months)
| Accident Year | 12 | 24 | 36 |
|---|---|---|---|
| 2014 | 52 | 28 | 12 |
| 2015 | 46 | 25 | |
| 2016 | 42 |
- Reported claim counts exclude claims closed without payment.
- Historical claim cost inflation is 0%.
Part a (0.75 points)
Calculate the paid to reported claim ratio triangle and briefly describe what it suggests about changes in:
i. Settlement rates ii. Case reserve adequacy
Part b (1.5 points)
Calculate the closed to reported claim count ratio triangle and the average case outstanding triangle and briefly describe what the triangles suggest about changes in:
i. Settlement rates ii. Case reserve adequacy
Answer this question and see the worked solution