• We are pleased to announce that the winner of our Feedback Prize Draw for the Winter 2024-25 session and winning £150 of gift vouchers is Zhao Liang Tay. Congratulations to Zhao Liang. If you fancy winning £150 worth of gift vouchers (from a major UK store) for the Summer 2025 exam sitting for just a few minutes of your time throughout the session, please see our website at https://www.acted.co.uk/further-info.html?pat=feedback#feedback-prize for more information on how you can make sure your name is included in the draw at the end of the session.
  • Please be advised that the SP1, SP5 and SP7 X1 deadline is the 14th July and not the 17th June as first stated. Please accept out apologies for any confusion caused.

Sept 2005: Q1 iii

J

jensen

Member
Hi

Am I (I'm sure) reading the solution wrongly? It seems to me 1 out of the 6 methods suggested are redundant:

"Extract the whole claim incl history if exceeds threshold"
Vs
"Once large always large."


Sounds the same to me.
 
Hi Jensen,

These two methods are different:

"Extract the whole claim including history if exceeds threshold" - this considers the claim amount as at the time of the reserving exercise. If it is above the large loss threshold then the whole claim is removed from the triangles.

"Once large always large" - as at the time of the reserving exercise, the claim amount may be lower than the large loss threshold. However, if it had been higher than the threshold at any time in the past then it would still be removed (even though it is no longer classified as a large claim).

This question was repeated in April 2012 so have a look at ASET for a fuller discussion of the advantages and disadvantages of each of the six approaches.

Coralie
 
You must log in or register to reply here.
Back
Top