- TIA EXAM 5 - FRIEDLAND CH 01

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Author:
CDP
ID:
66022
Filename:
- TIA EXAM 5 - FRIEDLAND CH 01
Updated:
2011-02-13 11:53:13
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TIA EXAM
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Description:
FRIEDLAND CH 01
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  1. To whom is it important that we accurately estimate unpaid claims?
    • 1. Internal Management
    • 2. Investors
    • 3. Regulators
    • 4. State Law
    • 5. NAIC
  2. Importance of accurately estimating unpaid claims for Internal Management
    • Internal management
    • Influences pricing
    • Influences decision making:
    • UW - increase business, exit market
    • Strategic - reinsurance needs
    • Financial - capital management
  3. Importance of accurately estimating unpaid claims for Investors
    • Investors
    • Can cause misstated balance sheet & income statement
    • Misleading financial metrics
  4. Importance of accurately estimating unpaid claims for Regulators
    • Regulators
    • Rely on financial statements to supervise
    • Misstatement of true financial position can delay regulators intervention/help
  5. Ranges of unpaid clm estimates
    Different methods produce varying estimates

    • Balance sheet requires point estimate (some require 75% confidence level)
  6. Define an Actuarial central estimate
    Actuarial central estimate: expected value over the range of reasonably possible outcomes
  7. Define Insurer
    Risk bearer for P&C exposures
  8. Define Reserves
    Amount booked in a financial statement
  9. Define Unpaid Claim estimate
    Actuary's estimate of the obligation for future payment resulting from clms due to past events
  10. Define Carried Reserve
    Carried reserve: amt reported in a published statement
  11. 5 components of unpd clm estimate
    • Case outstanding on know clms
    • Prov for future dvpmt on know clms
    • Estimate for reopened clms
    • Prov for clms IBNR
    • Prov for clms in transit
  12. IBNR claims are often split into two components.
    What are they are why is this done?
    • 1. IBNYR (pure IBNR)
    • 2. IBNER (aka development on known claims

    Separated to test adequacy of Case O/S over time

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