Q2, part (ii) how did they calculate the average accident date in september, I would have guessed that accidents occurred on average 6months later if policies written evenly, therefore none would be expected to occur in 2006? How would we calc the claims expected in each month? Q6, part (iv) don’t know where they got the discount factor here. Cant follow the solution at all, why do they find development factors for the investment return discount we may use? Thanks again Leala
Q2 part (ii): Don't think you've thought this through fully! Question says the average accident date in 2006. You're thinking of average accidents from all the business written in 2006, which yes, would be somewhere in 2007. The exact calculation depends on your assumptions and there is more than one valid approach. In ASET, we explain these approaches in detail. Q6 part (iv): This has been a common exam question in the past. Again, ASET goes into the nitty gritty detail of different approaches, including the one the examiners chose. You're discounting outstanding claims payments, so start with your paid claims triangle, work out how long it takes for claims to be paid, apply your investment returns to these, and thus find a 'present value'.
