CAS Exam 5 Spring 2019, Question 18
Study guide: Exam 5
Given the following information as of December 31, 2018:
| Accident Year | Reported Claims | Age-to-Ultimate | Earned Premium | Pure Premium Trend Factors |
|---|---|---|---|---|
| 2016 | 2,900 | 2.300 | 6,500 | 1.067 |
| 2017 | 1,800 | 3.900 | 8,100 | 0.983 |
| 2018 | 1,000 | 7.600 | 8,000 | 1.000 |
- There are no historical rate changes.
- There is no premium trend.
Part a (1.5 points)
Calculate the ultimate claims for accident year 2017 using the reported Cape Cod technique.
Part b (0.5 points)
Describe a scenario where the paid Cape Cod technique is preferred to the reported Cape Cod technique.
Answer this question and see the worked solution