Trending claims question

You should always inflate from the average date of claim payment in your historical data to the average date of claim payment for claims that will arise from the period in which the premium rates you are deriving will apply.

In some questions you can ignore the delay between the claim event being notified/reported to the insurer and the claim being settled (the settlement delay) or at the very least you are assuming that the settlement delay is unchanged, but make sure that you write this down as one of your assumptions!

 

Hi Hello 1991

Yes strictly speaking you project from average payment date to average payment date, especially if the question gives you information about reporting and settlement delays.

If the question doesn't give you anything on these then you need to make suitable assumptions. In some cases you may be able to assume no event, reporting or settlement delays, which means you can project from date of claim event to date of claim event.

 

Hi there

I think the answer to this really depends on what information/data you are given in the question.

In ST8 April 2012 Q6, you did not need to "manually" adjust the claims data because the development pattern you were provided with allowed for the fact that the claims data was to 31 March 2012 in each case.

In 9B 1992, Q1,paper 2, you needed to manually adjust both the number of claims and the total claims cost because this was a shorter-tailed class where you weren't given any development pattern to apply.

Remember whatever you do you need to make sure that your claims and exposure data are consistent. For accident years you should look at incurred/ultimate claims on earned exposures and earned premiums and for underwriting years you need to look at ultimate claims (on earned and unearned exposures) as well as written premiums.