Claim Liabilities

chrisboersma

Where is "unpaid claims" first introduced?

I'm trying to find the basic instructions/definition for the calculation of unpaid claims: eg. Timing, Costs included, payment pattern etc.

It seems like it's used a lot, but never officially defined (MCT, duration, etc.)

AR.Instructions doesn't have it ...?
MCT doesn't have it - margin for...
Discounting doesn't have it - how do I discount unpaid claims?
MfAD - nope explains additional margin

In AR Instruction (Section 6)
Unpaid claims and adjustment expenses must be reported at gross value, and where discounting is required by the insurer’s primary regulator, on a discounted basis. Please refer to “Section V - Jurisdictional Requirements” for further guidance.

passexam6c

I believe unpaid claims is discounted to the valuation date, say if you're evaluating claims liability at the end of 2017, they would be discounted back to this time point.
The payment pattern varies based on the line of business.
Costs included are usually just claims and ULAE.

chrisboersma

CSOP 1120 Definitions:

Claim liabilities are the portion of insurance contract liabilities in respect of claims incurred on or before the calculation date.

In combination with

CIA: Discounting 3.1

Cash Flow Associated with Claim Liabilities: The first step in deriving the actuarial present value is to estimate the cash flow associated with the claim liabilities in order to derive the present value of expected claim and claim adjustment expense payments. Expected claim payments are calculated by applying an expected payment pattern to the undiscounted unpaid claims.

graham

It looks like you answered your own question? In the wiki, I introduced APV for claims in the very first boot camp article because it's so important. It underlies many of the common calculation problems, but the actual theoretical material is hidden deep within other readings, as you found.

Leon

Unpaid claims are typically first introduced in the context of insurance claims processing and accounting. An unpaid claim refers to a claim that has been submitted to an insurance company or other payer but has not yet been paid.

The calculation of unpaid claims typically involves tracking the amount of money owed for claims that have been submitted but not yet paid, and then estimating the amount of money that will ultimately be paid out for those claims. This estimation is based on historical payment patterns and other factors such as the severity of the claims, the type of insurance policy, and any applicable deductibles or co-payments.

In general, the process of calculating unpaid claims involves several steps, including:

1. Identifying all claims that have been submitted but not yet paid.
2. Categorizing the claims by age, severity, type of insurance policy, and other relevant factors.
3. Estimating the amount of money that will ultimately be paid out for each category of claims based on historical payment patterns and other factors.
4. Adding up the estimated amounts for all categories of unpaid claims to arrive at a total estimate of unpaid claims.

The timing and costs included in the calculation of unpaid claims may vary depending on the specific insurance policy and the nature of the claims being submitted. It is important to consult the policy documents and any relevant regulations to ensure that the calculation is accurate and compliant with applicable rules and standards.