CAS Exam 7 Spring 2017, Question 1
Study guide: Exam 7
Given the following information as of December 31, 2016:
| Accident Year | Earned Premium | Cumulative Reported Loss: 12 Months | Cumulative Reported Loss: 24 Months | Cumulative Reported Loss: 36 Months |
|---|---|---|---|---|
| 2014 | $1,100,000 | $450,000 | $585,000 | $614,250 |
| 2015 | 1,210,000 | 600,000 | 840,000 | |
| 2016 | 1,331,000 | 850,000 |
- Assume no further development after 36 months.
Calculate the ultimate losses for each accident year using each of the following methods:
- i. Collective loss ratio
- ii. Individual loss ratio
- iii. Benktander loss ratio
- iv. Optimal credible loss ratio
Part a (2 points)
Answer this question and see the worked solution