Dear all Suppose there is a question in which we have non cumulative data for Claim Amount and Claim Numbers and we have to estimate outstanding claim amount using Average Cost per Claim method of Run off triangles. We are also given past inflation and future inflation. Then what steps will be involved in solving it? Is their any unique way? As it is apparent that inflation will impact claim amount not claim numbers. Please reply asap Regards Rajat
Depends how inflation is given - inflation for overall claims or ACPC (there may even be inflation for claim numbers...) Apply it to the appropriate incremental figures. Accumulate them then do the gross up method as usual.
Hello sir If it's not clear from qus. whether to inflate no. of claims figures also, then what should we do? In this qus.6 part(i) , they have not inflated no. of claims data.
Well inflation is normally only applied to claim amounts. So it is natural that they have just applied it to claim amounts.