CAS Exam 5 Spring 2018, Question 18
Study guide: Exam 5
Given the following data as of December 31, 2017:
Cumulative Reported Claims ($000s) as of (months)
| Accident Year | 12 | 24 | 36 | 48 |
|---|---|---|---|---|
| 2014 | 3,002 | 3,585 | 3,857 | 4,020 |
| 2015 | 3,440 | 4,107 | 4,522 | |
| 2016 | 3,427 | 4,109 | ||
| 2017 | Not Provided |
Cumulative Reported Claim Counts as of (months)
| Accident Year | 12 | 24 | 36 | 48 |
|---|---|---|---|---|
| 2014 | 940 | 975 | 980 | 980 |
| 2015 | 1,060 | 1,103 | 1,106 | |
| 2016 | 1,053 | 1,095 | ||
| 2017 | 1,085 |
Reported Claims Age-to-Age Factors
| Accident Year | 12-24 | 24-36 | 36-48 |
|---|---|---|---|
| 2014 | 1.194 | 1.076 | 1.042 |
| 2015 | 1.194 | 1.101 | |
| 2016 | 1.199 |
Reported Claim Count Age-to-Age Factors
| Accident Year | 12-24 | 24-36 | 36-48 |
|---|---|---|---|
| 2014 | 1.037 | 1.005 | 1.000 |
| 2015 | 1.041 | 1.003 | |
| 2016 | 1.040 |
| 5% | Claim severity trend |
| 30% | Claim severity reduction due to tort reform on claims occuring on or after January 1, 2017 |
- The tort reform has no effect on claim reporting.
- There is no claim development after 48 months.
Estimate ultimate claims for accident year 2017 using a frequency-severity technique.
Part a (2.5 points)
Answer this question and see the worked solution