Hi, I am confused about the ACPC calculation methods , I know there are different ways of calculation , but not sure which I should take to avoid not getting marks during the exam . in the reading material , i have found two ways of calculation which are very different 1. CH 15 page 57: the method is : - average incurred cost = incurred claim data (cumulative) / number of reported - then projection to ultimate for average incurred cost - then average projected incurred cost * projected number of claims however, in the questions at the end of chapter , it is different 2. Question 15.5, the method is : - incremental (instead of cumulative) claim paid / number of claim settled ; - projection to ultimate number of claims , but no projection of claim settled why the approaches are very different ? thank you very much for your time
Just search for 'ACPC' in these forums and you'll find plenty of explanations. Which method you choose could well depend on the data you've been given in the question.
