Hi all, Wanted to clarify the following: "A closing date is the cut-off date when the recording of claims stops for a particular period. For example, if the recording of claims reported has a closing date of five working days before the end of the period, then a claim reported, say, three working days before 31 December will be recorded as a claim reported in the following year. If this closing date is unchanged from one period to the next, claims development patterns are not distorted, other things being equal. However, if the closing date is changed to, say, three working days before the quoted date, then the claims development pattern for the 2020 year will be slightly slower due to the inclusion of some claims in the 2020 year that would otherwise have been included in the 2021 year." Regarding the bolded portion, if the closing date is now earlier, less claims will be recorded in the 2020 year so this leads to the claims development pattern for the 2020 year to be slightly slower. But I'm not sure what it means by the inclusion of "some claims in the 2020 year that would otherwise have been included in the 2021 year", shouldn't this be the other way around? Thanks in advance for your help!
In the bold sentence, the closing date is now later - it is only 3 days before the quoted date (eg 28 December 2020) whereas previously it was 5 days before the closing date (eg 26 December 2020). The change means more claims are included in the 2020 year (instead of being included in the 2021 year) than they would have been under the previous process.
