CAS Exam 5 Spring 2018, Question 19

Study guide: Exam 5

Briefly evaluate the appropriateness of the paid development technique and the reported Bornhuetter-Ferguson technique in the following scenarios:

Part a (0.5 points)

The company pays a large shock loss early in the life of the accident year.

Part b (0.5 points)

The company has difficulty compiling an accurate history of rate changes.

Part c (0.5 points)

The company begins to settle claims earlier.

Part d (0.5 points)

Severity trend is higher than expected.

Answer this question and see the worked solution

Concepts tested

• Bornhuetter-Ferguson Method
• Chain Ladder Method
• Settlement Rate

More questions from this set

• CAS Exam 5 Spring 2018, Question 18
• CAS Exam 5 Spring 2018, Question 20