S
Shillington
Member
This question gave you information on paid claims for 2009, ... ,2013 and said that the business started being written mid-way through 2009.
The basic chain ladder had been given and the question was to comment on it and provide a new best estimate based on changing the data or methodology.
One of my key points in answering this question was that since they only started writing the business mid-way through 2009 they probably improved their underwriting standards during this period which led to poor experience in 2009 and much improved experience subsequently. As such, in my solution for changing the best estimate I kept the 2009 data as it was and ignored it for the calculation of the 2010 and later years best estimate reserve.
The solution didn't mention this at all, instead it carried out linear interpolation on the data which gave a slightly better triangle (from the point of view of the statistics calculated in part i.) but still not that good.
When it came to the final part which asked you to re-assess the statistics etc I didn't have anything to write as I didn't edit the data. I think my method was fine but I would have lost out on the 5 marks at the end because I didn't think of using the solution given in the notes.
Would the approach I took lose marks/be penalised for not spotting a data adjustment?
The basic chain ladder had been given and the question was to comment on it and provide a new best estimate based on changing the data or methodology.
One of my key points in answering this question was that since they only started writing the business mid-way through 2009 they probably improved their underwriting standards during this period which led to poor experience in 2009 and much improved experience subsequently. As such, in my solution for changing the best estimate I kept the 2009 data as it was and ignored it for the calculation of the 2010 and later years best estimate reserve.
The solution didn't mention this at all, instead it carried out linear interpolation on the data which gave a slightly better triangle (from the point of view of the statistics calculated in part i.) but still not that good.
When it came to the final part which asked you to re-assess the statistics etc I didn't have anything to write as I didn't edit the data. I think my method was fine but I would have lost out on the 5 marks at the end because I didn't think of using the solution given in the notes.
Would the approach I took lose marks/be penalised for not spotting a data adjustment?