CAS Exam 6C Spring 2015, Question 25
Study guide: Exam 6C
The following is a partially completed Unpaid Claims and Loss Ratio Analysis Exhibit for a property and casualty insurance company as at December 31, 2014:
| Accident Year (1) | Paid Loss Cumulative (3) | Total Undiscounted Unpaid Claims and Adjustment Expense (6) | Present Value of Unpaid Claims and Adjustment Expenses - Total (7) | PfAD Claims (8) | PfAD Reinsurance (10) | PfAD Interest Rate (11) |
|---|---|---|---|---|---|---|
| 2013 | $345,000 | $155,000 | $152,470 | $12,198 | 0 | $623 |
| 2014 | $170,000 | $405,000 | $396,539 | $31,723 | 0 | $2,075 |
| Accident Year (1) | Discounted Reserves including PfAD (12) | Earned Premiums (13) | Investment Income from UPR (14) | Cum. Investment Income from Unpaid Claim Reserves (15) | Loss Ratio Undiscounted (16) | Loss Ratio Discounted (17) |
|---|---|---|---|---|---|---|
| 2013 | $165,290 | $760,000 | $11,400 | A | C | E |
| 2014 | $430,337 | $850,000 | $12,750 | B | D | F |
Additional information is also available:
- Assume there is no reinsurance.
- Investment yield for 2013 and 2014: 3%.
- Accident year 2013 reserves discounted with Provision for Adverse Deviation (PfAD) as at December 31, 2013 were equal to $371,896.
Determine each of the following amounts: A, B, C, D, E and F.
Part a (2 points)
Answer this question and see the worked solution