CAS Exam 7 Spring 2017, Question 12
Study guide: Exam 7
Given the following data for a book of business:
| Accident Year | Cumulative Paid Claims ($000): 6 Months | 18 Months | 30 Months | 42 Months | 54 Months | 66 Months | Exposure ($000) |
|---|---|---|---|---|---|---|---|
| 2011 | 2,000 | 2,250 | 2,500 | 2,750 | 90,000 | ||
| 2012 | 1,750 | 2,250 | 2,500 | 2,650 | 100,000 | ||
| 2013 | 1,750 | 3,250 | 4,000 | 4,750 | 130,000 | ||
| 2014 | 2,000 | 3,750 | 4,500 | 200,000 | |||
| 2015 | 3,000 | 4,000 | 250,000 | ||||
| 2016 | 2,000 | 320,000 |
- The most recent diagonal is as of March 31, 2016.
Part a (1 point)
Briefly describe four issues in the data above that should be addressed when implementing the over-dispersed Poisson (ODP) bootstrap model.
Part b (1 point)
For each data issue identified in part a. above, briefly describe an adjustment to the ODP bootstrap model to address the issue.
Answer this question and see the worked solution