CAS Exam 5 Spring 2019, Question 21
Study guide: Exam 5
Given the following data evaluated as of December 31, 2018:
| Accident Year | Net of Reinsurance Reported Claims ($000s) at 12 months | at 24 months | at 36 months | Ultimate Frequency |
|---|---|---|---|---|
| 2016 | 5,000 | 5,500 | 5,700 | 15% |
| 2017 | 5,800 | 6,400 | 15% | |
| 2018 | 12,000 | 15% |
- There are no catastrophes or large claims in accident year 2018.
- No changes have been made to claims handling practices.
Part a (0.5 points)
Briefly describe two scenarios that could drive the elevated reported claims in accident year 2018.
Part b (1 point)
Discuss a reasonable approach to estimate ultimate claims for each scenario identified in part a. above.
Answer this question and see the worked solution