Powerpack Station 4 Reserving E01

agnichatagnichat
in GENERAL - RESERVING

Question 4.

2018 Spring #23.

The unpaid is provided as $11235 in cell S33, but shouldn't we subtract 53000 (cell e15) from that? or does doing so violate one of the assumptions. Probably over/under thinking something here.

Thanks for the quick follow ups to date.

Cj. (T-2 days).

Comments

  • GrahamGraham

    I'm very appreciative that you're taking the time to go through these practice problems and let me know when you find issues! You guys are the first ones to use the PowerPack and this is how I get all the errors corrected.

    In this case however, I believe my solution is correct. I went back to the actual CAS exam problem and substituted their numbers into my template and I got the same answer they did.

    Actually, it's good you asked this question before the exam because for this type of ULAE problem, you calculate the unpaid directly. This is in contrast to other reserving methods where you calculate the ultimate directly and then subtract the paid amount to get the unpaid. Here's the classical ULAE formula:

    • unpaid ULAE  = (ULAE ratio) x [ 50% x (Case + IBNER) +  100% x (IBNYR) ]

    You can read the details in the wiki here:

    Slay the beast on Wednesday!

  • agnichatagnichat

    Makes sense. Thanks Graham!

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