CAS Exam 5 Fall 2019, Question 19
Study guide: Exam 5
Given the following data as of December 31, 2018:
| Accident/Calendar Year | Cumulative Reported Claims ($000s) | Earned Premium ($000s) |
|---|---|---|
| 2016 | 7,200 | 10,400 |
| 2017 | 6,300 | 11,000 |
| 2018 | 4,700 | 11,500 |
| Cumulative Age-to-Ultimate Factors | 12-Ult | 24-Ult | 36-Ult | 48-Ult |
|---|---|---|---|---|
| 1.764 | 1.260 | 1.050 | 1.000 |
| Annual Trends | |
|---|---|
| Claims | 3.0% |
| Premium | 2.0% |
| Effective Date | Rate Change |
|---|---|
| July 1, 2016 | 4.0% |
| July 1, 2017 | 2.0% |
- All policies have an annual term and are written evenly throughout the year.
Calculate ultimate claims for accident year 2017 using the Cape Cod technique.
Part a (3 points)
Answer this question and see the worked solution