In discussing the pattern I said that
- if written on a claims-occurring bases
[a] We would expect half of all claims to occur in first year of development and half to occur on second.
We note that only 18.6% were reported by end of first year, so 31.4% have not been notified yet.
[c] Even if we assume that all of these are reported by second year of development, shouldn't claims occurring in second year also have the same delay. However the second year delay is 100-87% = 13%.
[d] this anomaly needs to be investigated.
[*] The above might indicate that these are written on claims-reported basis.
[a] possibly we are underreserving in first year.
maybe it is a case such that policyholders need to submit all their PL claims by end of their policy and tend to do it at that point. All of the policies would end in the second year (unless written on 1 January).
Am I completely off track here? What do you think guys?
Last edited by a moderator: Apr 9, 2015