CAS Exam 6C Fall 2017, Question 16
Study guide: Exam 6C
The following information is available for a property and casualty insurance company as at December 31, 2016. All amounts are in thousands of dollars ($000s).
Cumulative Paid Losses
| Accident Year | 12 Months of Development | 24 Months of Development | 36 Months of Development |
|---|---|---|---|
| 2014 | 9,000 | 26,000 | 31,000 |
| 2015 | 15,000 | 28,000 | |
| 2016 | 13,000 |
Actuarial Present Value of Loss and ALAE
| Accident Year | 12 Months of Development | 24 Months of Development | 36 Months of Development |
|---|---|---|---|
| 2014 | 31,000 | 13,000 | 8,000 |
| 2015 | 29,000 | 14,000 | |
| 2016 | 25,000 |
The company started its operations in 2014. The annual yield was 3% in 2014, 2015 and 2016.
Calculate the total margin or deficiency for unpaid claims of prior years during calendar year 2016.
Part a (1.25 points)
Answer this question and see the worked solution
Concepts tested
- Excess (Deficiency) Ratio
- Reserve Adequacy
- Unpaid Claims
- Canadian Annual Return
- Loss Reserve Discounting