Actuarial Notes

CAS Exam 5 Fall 2017, Question 24

Study guide: Exam 5

Given the following data:

Accident Year	Paid Claims ($000) as of 12 months	24	36	48
2013	1,100	1,650	1,815	1,815
2014	1,210	1,820	2,005
2015	1,335	2,005
2016	1,470

Accident Year	Reported Claims ($000) as of 12 months	24	36	48
2013	1,540	1,980	1,888	1,815
2014	1,694	2,184	2,060
2015	1,869	2,306
2016	1,911

Accident Year	Closed Claim Counts as of 12 months	24	36	48
2013	550	825	908	908
2014	578	867	954
2015	605	908
2016	635

Accident Year	Open Claim Counts as of 12 months	24	36	48
2013	165	83	18	0
2014	173	87	19
2015	181	91
2016	191

Accident Year	Paid Claims to Reported Claims Ratio as of 12 months	24	36	48
2013	71.4%	83.3%	96.2%	100.0%
2014	71.4%	83.3%	97.1%
2015	71.4%	87.0%
2016	76.9%

Accident Year	Closed to Reported Counts Ratio as of 12 months	24	36	48
2013	76.9%	90.9%	98.1%	100.0%
2014	77.0%	90.9%	98.0%
2015	77.0%	90.9%
2016	76.9%

Accident Year	Average Paid Claim Severity ($) as of 12 months	24	36	48
2013	2,000	2,000	1,999	1,999
2014	2,093	2,099	2,096
2015	2,207	2,208
2016	2,315

Accident Year	Average Case Outstanding ($) as of 12 months	24	36	48
2013	2,667	3,976	4,033	0
2014	2,798	4,184	3,158
2015	2,950	3,305
2016	2,309

There are no partial payments.
There is no development after 48 months.

Part a (2 points)

Estimate the accident year 2016 IBNR using the Berquist Sherman case outstanding adjustment.

Part b (0.5 points)

Propose and briefly justify another appropriate technique for developing the accident year 2016 IBNR.

Answer this question and see the worked solution

Concepts tested

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