The solution states that "Paid projections can help identify changes or inconsistencies in the strength of case reserves or possible redundancies." How would you identify inconsistency in the case reserve strength? What does "possible redundancies" mean? Thanks
Paid claim projections do not include the case reserves so they are not affected by the strength of the case reserves. By contrast, incurred or reported claims projections include the case reserves so they are affected by any changes in the strength of the case reserves over time. Hence by comparing paid and incurred projections you can identify any changes in the strength of the case reserves over time. Redundancies in the case reserves are when the case reserve that has been estimated proves to be too high and the claim ultimately ends up settling for less.
