Assignment 2 Solutions

# Assignment 2 Solutions - 1 Solution Note that there is a...

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1. Solution Note that there is a lot of extaneous information. Since we are interested in the value of 2006 at 24 months we need to look at data from 2008 which is currently at 24 months of development. Calculate the average case outstanding for 2008 at 24 months. = (incurred @ 12/31/2009 - paid @ 12/31/2009)/(open claims @ 12/31/2009) = 1000 x (72,350 - 36,175)/(1808) = 20,008.30 Trend it backwards at 10% = 20,008.30/(1.1)^2 = 16,535.79 Now multiply by open claims for 2007 @ 12/31/2007 and add paid losses at 12/31/2007. = 16,535.79 x 1,753 + 29,664 = 58,651,239.90

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2. Solution a) Calculate case outstanding triangle. AY 12 24 36 2007 11,700 20,000 17,100 2008 24,600 26,250 2009 18,880 Calculate the average case outstanding triangle. Calculate the average paid triangle. AY 12 24 36 AY 12 24 36 2007 390 500 855 2007 726 838 940 2008 410 525 2008 762 880 2009 472 2009 800 Calculate the trend in average case. Calculate the trend in average paid. AY
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Assignment 2 Solutions - 1 Solution Note that there is a...

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