You have the task of choosing which set of reported loss development factors, based on a large industry-wide data set, would be best to use for your client. You are given the diagonal entries of the accident year reported loss triangle, as of December 31, 2015:
Reported Claims Development Factors
The following claims are reported during calendar year 2016:
Determine which of the two reported claim development patterns shown above best reflect the actual emergence of claims. Explain your answer.
4. You have the task of choosing which set of reported loss development factors, based on a large industry-wide data set, would be best to use for your client. You are given the diagonal entries of the accident year reported loss triangle, as of December 31, 2015:
Cumulative Reported Claims ($,000) Accident Year Months 12 24 36 48 2011 148,459 2012 135,337 2013 140,800 2014 115,050 2015 147,194
Reported Claims Development Factors 12-Ult 24-Ult 36-UIt 48-UIt 1.502 1.155 1.050 1.000 1.452 1.134 1.060 1.000
Pattern I Pattern II
The following claims are reported during calendar year 2016:
Accident Year 2014 2013 10,100 8,104 2016 114,800 2015 34,200 2012 1,000
Total 168,204 CY 2016
Determine which of the two reported claim development patterns shown above best reflect the actual emergence of claims. Explain your answer.
