C
Cheng
Member
Hi all,
Can someone please explain qs 3.2, i don't really understand the solution given. For example, for (a), how does a 2.5% increase in ult claims for 2011 and a 0.5% decrease in ult claims for 2010 result in an increase of outstanding claims by ard 3%?
Qs 3.6: When doing the inflation adjusted average cost per claim method,
1) why do we need to adjust the projected incremental number of claims settled? (as suggested in the solution)
2) instead of the method suggested in the solution, can i estimate the outstanding claims reserve by
i) projecting the average claims paid (in 2011 money terms) for each accident year (i.e. the 2nd half of the triangle) using the chain ladder method
ii) and then multiply the projected average claims paid by the projected incremental number of claims settled, to obtain the expected incremental claims paid
iii) then only adjust the expected incremental claims paid for inflation
Thanks in advance!
Can someone please explain qs 3.2, i don't really understand the solution given. For example, for (a), how does a 2.5% increase in ult claims for 2011 and a 0.5% decrease in ult claims for 2010 result in an increase of outstanding claims by ard 3%?
Qs 3.6: When doing the inflation adjusted average cost per claim method,
1) why do we need to adjust the projected incremental number of claims settled? (as suggested in the solution)
2) instead of the method suggested in the solution, can i estimate the outstanding claims reserve by
i) projecting the average claims paid (in 2011 money terms) for each accident year (i.e. the 2nd half of the triangle) using the chain ladder method
ii) and then multiply the projected average claims paid by the projected incremental number of claims settled, to obtain the expected incremental claims paid
iii) then only adjust the expected incremental claims paid for inflation
Thanks in advance!