CAS Exam 5 Spring 2018, Question 17
Study guide: Exam 5
Given the following:
Cumulative Reported Claims ($000) as of (months)
| Accident Year | 12 | 24 | 36 | 48 | 60 |
|---|---|---|---|---|---|
| 2013 | 4,850 | 6,060 | 6,670 | 7,000 | 7,000 |
| 2014 | 5,800 | 7,270 | 8,000 | 8,400 | |
| 2015 | 7,600 | 9,500 | 10,500 | ||
| 2016 | 9,350 | 11,700 | |||
| 2017 | 11,800 |
| Calendar Year | Earned Premium ($000) |
|---|---|
| 2013 | 10,000 |
| 2014 | 12,000 |
| 2015 | 15,000 |
| 2016 | 18,000 |
| 2017 | 22,000 |
- There have been no rate changes.
- There is no development beyond 48 months.
Part a (1.5 points)
Calculate ultimate claim ratios for each accident year using the reported Bornheutter-Ferguson technique with a 70% expected claims ratio.
Part b (0.5 points)
Evaluate the appropriateness of using the reported Bornhuetter-Ferguson technique as applied in part a. above.
Answer this question and see the worked solution