- TIA EXAM 5 - FRIEDLAND CH 15

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CDP
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- TIA EXAM 5 - FRIEDLAND CH 15
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2011-04-01 20:33:37
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TIA EXAM FRIEDLAND
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- TIA EXAM 5 - FRIEDLAND CH 15
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  1. List 5 estimates should be incorporated within methods when estimating unpaid claims, as suggested by B/S
    • 1. Projections of reported claims
    • 2. Projections of paid claims
    • 3. Promections of ult rpt cc and severity
    • 4. Estimates of # and ave amt of o/s claims
    • 5. Claim ratio estimates
  2. Whenever possible, what 3 types of analysis should be incorportated?
    • 1. Credibility
    • 2. Regreassion analysis
    • 3. Data smoothing
  3. It's the actu's responsibility to select the most appropriate estimate of unpaid claims. What should s/he select & what is gained from analysis?
    Select highly stable method and highly responsive

    • Informative to see spread of estimates from different approaches
    • * Helps with understanding the range and distn of possibilities
    • * May show sensitivity of estimates to varying assumptions and various methodologies
  4. List the 4 steps involved in the general selection process for an estimate of unpaid claims
    • 1. Actu must select more appripriate estimate of unpaid claims
    • * Select from highly stable methods and highly responsive

    • 2. Retroactively test methods if sufficient claim history is available
    • * Evaluate appropriateness of technique
    • * Determine if accurate & unbiased

    • 3. Actuary should explain significant differences btwn projections of various mtds
    • * Changes in operations, procedures

    • 4. Final check of selected ultimate claims
    • * Include calculation of CR, Sev, Pure Prem, Claim Freq
    • * Compared implied Case O/S & unreported claim on open and unrpted clms
  5. When reviewing reasonableness of selected ult clms, what stats should be reviewed?
    • perspective of yr-to-yr changes
    • knowledge gained from meetings w/ mgmt
    • knowledge of industry in general
  6. Name 3 acceptable ways to select ultimate claims
    • Select 1 method for all years
    • Select different methods for different AYs
    • Use a weighted ave based on assigned weights to various mtds
  7. Hugh White's question: You try to establish a reserve but find that the rpted % of expected losses is 8% higher than it should be. List 3 Options & their method names.
    • 1. Reduce the Bulk Reserve (IBNR) a corresponding amt b/c you think it was an acceleration in the rate of report
    • EC Tech
    • 2. Leave the IBNR at the same % level of expected claims b/c you think there was a random fluctuation like a large claim
    • BF Tech
    • 3. Increase the IBNR proportionatly to the increase in actual reported over expected rpted b/c not 100% sure of exp claim estimate
    • Dvmt Tech

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