CAS Exam 5 Spring 2017, Question 17
Study guide: Exam 5
Given the following information for an insurance company as of December 31, 2016:
Cumulative Reported Claims ($000) as of (months)
| Accident Year | 12 | 24 | 36 |
|---|---|---|---|
| 2014 | 68,600 | 87,800 | 100,000 |
| 2015 | 72,800 | 91,500 | |
| 2016 | 55,900 |
Cumulative Reported Claim Counts as of (months)
| Accident Year | 12 | 24 | 36 |
|---|---|---|---|
| 2014 | 80 | 95 | 100 |
| 2015 | 85 | 99 | |
| 2016 | 87 |
- There is no development after 36 months for reported claims or reported claim counts.
- A new law limiting claimant benefits came into effect on January 1, 2016 and is applicable to accidents occurring on or after January 1, 2016. The expected impact is a 25% reduction in claim severity.
- There is no loss trend.
Estimate ultimate claims for accident year 2016 as of December 31, 2016 using a frequency-severity technique.
Part a (2 points)
Answer this question and see the worked solution
Concepts tested
- Frequency-Severity Method
- Severity Analysis
- Claim Count Triangle
- Development Factor
- Changing Conditions