Question: 8.6. Loss reserves are calculated using the closure method. Trend is 6%. Percentage of claims closed and average incremental severity trended to CY5, by development

8.6. Loss reserves are calculated using the closure method. Trend is 6%. Percentage of claims closed and average incremental severity trended to CY5, by development year, are Development Year 1 3 Average trended incremental severity 1200 Percentage of claims closed 40% 2 1500 2000 5000 10000 20000 30% 50% 60% 80% 100% 4 5 For AY4, expected ultimate claim count is 1000. 500 claims were closed during CY4 and 100 during CY5. Calculate the loss reserve for AY4's losses

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