CAS Exam 5 Spring 2019, Question 23
Study guide: Exam 5
Given the following as of December 31, 2018:
| Accident Year | Per Occurrence Retention | Stop-Loss Limit |
|---|---|---|
| 2015 | $1,000,000 | ** |
| 2016 | $1,000,000 | ** |
| 2017 | $1,500,000 | $5,000,000 |
| 2018 | $2,000,000 | $7,000,000 |
**2015 and 2016 have a combined stop-loss limit of $10,000,000 that applies to all claims occurring in both years.
Summary of Claims Under Per Occurrence Retention:
| Accident Year | Reported Claims | Percent Reported |
|---|---|---|
| 2015 | 2,000,000 | 70% |
| 2016 | 1,500,000 | 35% |
| 2017 | 800,000 | 20% |
| 2018 | 450,000 | 10% |
Large Claims (not included in the claims table above):
| Claim | Accident Year | Reported Claim |
|---|---|---|
| A | 2015 | 1,200,000 |
| B | 2015 | 1,500,000 |
| C | 2016 | 3,000,000 |
| D | 2017 | 1,750,000 |
- There will be no further development on large claims.
Calculate the estimated retained IBNR for all accident years using the reported development technique.
Part a (1.5 points)
Answer this question and see the worked solution