The cumulative claims paid each year under a certain cobort of insur- ance policies are recorded...

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The cumulative claims paid each year under a certain cobort of insur- ance policies are recorded in the table below, for accident years 2019, 2020, 2021 and 2022. Acc Yr Dev Yr 0 Dev Yr 1 Dev Yr 2 Dev Yr 3 2019 2,457 4,196 4,969 5,010 2020 2,618 4,715 5,561 2021 4,084 5,315 2022 5,341 (a) Calculate the development factors under the basic ladder tech- nique and state the assumptions underlying the use of this method. (3 Marks) (b) The rate of claims inflation over these years, measured over the 12 months to the middle of each year, is given in the table below: 20 3.1% 2020 2021 3.5 % 4.5% Calculate the development factors under the inflation-adjusted chain ladder technique and state the assumptions underlying the use of this method. (3 Marks) (c) Based on the development factors calculated in (a) and (b), cal- culate the fitted values under these two models and comment on how these compare with the actual values. (4 Marks) The cumulative claims paid each year under a certain cobort of insur- ance policies are recorded in the table below, for accident years 2019, 2020, 2021 and 2022. Acc Yr Dev Yr 0 Dev Yr 1 Dev Yr 2 Dev Yr 3 2019 2,457 4,196 4,969 5,010 2020 2,618 4,715 5,561 2021 4,084 5,315 2022 5,341 (a) Calculate the development factors under the basic ladder tech- nique and state the assumptions underlying the use of this method. (3 Marks) (b) The rate of claims inflation over these years, measured over the 12 months to the middle of each year, is given in the table below: 20 3.1% 2020 2021 3.5 % 4.5% Calculate the development factors under the inflation-adjusted chain ladder technique and state the assumptions underlying the use of this method. (3 Marks) (c) Based on the development factors calculated in (a) and (b), cal- culate the fitted values under these two models and comment on how these compare with the actual values. (4 Marks)

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a Development Factors under Basic Ladder Technique 1 Development Factor for 2019 Dev Yr 1 2648 2457 ... View the full answer