CAS Exam 7 Spring 2015, Question 4
Study guide: Exam 7
Given the following information:
Age-to-Age Paid Loss Development Factors
| Accident Year | 12-24 Months | 24-36 Months | 36-48 Months | 48-60 Months | 60-72 Months | 72-84 Months |
|---|---|---|---|---|---|---|
| 2008 | 7.00 | 2.55 | 1.60 | 1.30 | 1.20 | 1.05 |
| 2009 | 6.00 | 2.60 | 1.40 | 1.50 | 1.10 | |
| 2010 | 5.00 | 2.50 | 1.80 | 1.20 | ||
| 2011 | 5.50 | 2.80 | 1.50 | |||
| 2012 | 8.00 | 2.40 | ||||
| 2013 | 7.00 |
- z-value for the 95% confidence level:
\pm 1.96
Part a (3 points)
Using a 95% confidence threshold, test the null hypothesis that the triangle does not display significant calendar year effects.
Part b (0.5 points)
Provide two examples of calendar years effects that may cause loss development data not to be independent by accident year.
Answer this question and see the worked solution