CAS Exam 5 Fall 2018, Question 22
Study guide: Exam 5
Given the following information as of December 31, 2017:
| Calendar Year | Paid Claims ($) | Paid ULAE ($) |
|---|---|---|
| 2014 | 21,300 | 1,030 |
| 2015 | 20,900 | 1,040 |
| 2016 | 20,800 | 1,040 |
| 2017 | 21,200 | 1,090 |
| Accident Year | Paid Claims ($) | Reported Claim Counts | Closed Claim Counts | Ultimate Claim Counts | Ultimate Claims ($) |
|---|---|---|---|---|---|
| 2014 | 20,800 | 335 | 335 | 335 | 20,800 |
| 2015 | 18,000 | 300 | 270 | 330 | 21,400 |
| 2016 | 12,000 | 275 | 190 | 330 | 21,500 |
| 2017 | 5,000 | 200 | 80 | 335 | 21,800 |
| 60% | Percent of unallocated work that occurs when a claim is opened |
| 40% | Percent of unallocated work that occurs when a claim is closed |
- Claims are fully settled and paid by 48 months.
Part a (0.75 points)
Estimate the provision for claims incurred but not yet reported (IBNYR) for all accident years as of December 31, 2017.
Part b (1 point)
Estimate unpaid ULAE as of December 31, 2017.
Answer this question and see the worked solution