CAS Exam 5 Spring 2019, Question 15
Study guide: Exam 5
Given the following data evaluated as of December 31, 2018:
Cumulative Reported Claim Counts as of (months):
| Accident Year | 12 | 24 | 36 | 48 |
|---|---|---|---|---|
| 2015 | 250 | 238 | 245 | 260 |
| 2016 | 275 | 270 | 278 | |
| 2017 | 323 | 320 | ||
| 2018 | 375 |
Cumulative Reported Claims ($000s) as of (months):
| Accident Year | 12 | 24 | 36 | 48 |
|---|---|---|---|---|
| 2015 | 1,250 | 1,280 | 1,325 | 1,430 |
| 2016 | 1,365 | 1,395 | 1,450 | |
| 2017 | 1,625 | 1,675 | ||
| 2018 | 1,900 |
Reported Claim Count Age-to-Age Factors:
| Accident Year | 12-24 | 24-36 | 36-48 |
|---|---|---|---|
| 2015 | 0.952 | 1.029 | 1.061 |
| 2016 | 0.982 | 1.030 | |
| 2017 | 0.991 |
- $700,000 Accident year 2018 claim payments to date.
- There is no development after 48 months.
Part a (2 points)
Calculate an unpaid claims estimate for accident year 2018 using a frequency-severity technique.
Part b (0.25 points)
Briefly describe a situation that would lead to the downward development in reported claim counts observed from 12 to 24 months.
Answer this question and see the worked solution