CAS Exam 5 Fall 2017, Question 18
Study guide: Exam 5
Given the following claim experience:
Reported Claim Counts Excluding Claims Closed with No Payment as of (months)
| Accident Half-Year | 6 | 12 | 18 | 24 | 30 | 36 |
|---|---|---|---|---|---|---|
| 2014-1 | 3,700 | 3,515 | 3,508 | 3,504 | 3,504 | 3,504 |
| 2014-2 | 4,000 | 3,800 | 3,792 | 3,788 | 3,788 | |
| 2015-1 | 3,800 | 3,610 | 3,603 | 3,599 | ||
| 2015-2 | 3,700 | 3,515 | 3,508 | |||
| 2016-1 | 3,900 | 3,705 | ||||
| 2016-2 | 4,100 |
Reported Severity ($) Excluding Claims Closed with No Payment as of (months)
| Accident Half-Year | 6 | 12 | 18 | 24 | 30 | 36 |
|---|---|---|---|---|---|---|
| 2014-1 | 4,600 | 4,637 | 4,614 | 4,609 | 4,609 | 4,609 |
| 2014-2 | 4,900 | 5,023 | 4,998 | 4,993 | 4,993 | |
| 2015-1 | 4,400 | 4,435 | 4,413 | 4,409 | ||
| 2015-2 | 4,800 | 4,920 | 4,895 | |||
| 2016-1 | 4,600 | 4,637 | ||||
| 2016-2 | 4,500 |
- There is no development in counts or severity beyond 36 months.
Part a (2.25 points)
Calculate ultimate claims for accident year 2016 using a frequency-severity technique.
Part b (0.5 points)
Explain why the downward development observed in the claim count triangle in part a. above may occur.
Part c (0.5 points)
Discuss a diagnostic that can be used to test for seasonality.
Answer this question and see the worked solution
Concepts tested
- Frequency-Severity Method
- Chain Ladder Method
- Claim Count Triangle
- Seasonality
- Data Diagnostic Analysis