CAS Exam 5 Fall 2017, Question 21
Study guide: Exam 5
Given the following information:
| Accident Year | On-Level Earned Premium ($000) | Cumulative Reported Claims ($000) | Reported CDF to Ultimate |
|---|---|---|---|
| 2014 | 750 | 500 | 1.100 |
| 2015 | 800 | 475 | 1.250 |
| 2016 | 1,000 | 400 | 1.550 |
- A legislative change effective January 1, 2016 is expected to reduce claims costs by 20% for claims occurring after the effective date.
Estimate ultimate claims for accident year 2016 using the Cape Cod technique.
Part a (1.25 points)
Answer this question and see the worked solution
Concepts tested
- Cape Cod Method
- On Level Premium
- Cumulative Development Factor
- Expected Loss Method
- Changing Conditions