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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View Full Document2. 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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 Fall '11
 VanKooten
 1932, 1920, 1922, 1916, 1913, 1921

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