Hi everyone, I'm trying to work out the UPR calculation using 12 blocks of monthly policies each lasting 12 months. What I've done to visualise this is to create a table in excel with 1 unit of exposure in each month starting from July 2014 to June 2015. I've ended up with 144 units of exposure. However, to add up UPR after 2015, I've only had this number of units: 5,4,3,2,1 which adds up to only 15 (where 5 is the number of unit exposures in Jan 2016). However the solution seems to be 0.5 + 1.5 + 2.5 + 3.5 + 4.5 + 5.5. Appreciate your advice on where I'm going wrong, thanks in advance for your help!
Sounds like you are on the right lines, but remember the business will be written uniformly over each month and so on average written in the middle of each month. Hence, the business written in Jan 2015, will be 11.5 months earned and therefore 0.5 months unearned by the end of 2015 and so on.
