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investment return factor - sept 2003

L

Leala

Member
Subj 303 - Sept 2003 - Q7

How does the payment pattern and subsequent calculation of discounted factor only take into account development years 3 to 9?

Could you re-base using the incremental % paid in all the development years? or is there a reason the first 3 are excluded?

Thanks
 
They want the payment pattern that can be applied to the reserves.

The reserves here are ultimate minus paid. This is why we use the paid profile.

Since the accident is three years in, that much has been paid already, so we ignore these.

This is the same with discounting.

We are discounting the reserves (os+ibner+ibnr) and we have paid the first three years, so no discounting needed here.

So we rebase everything other than the first three years. Because the amounts need to add up to 100% of the reserves and not the ultimate claims.
 
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