excans:B49c82a944: Difference between revisions

Revision as of 19:25, 22 October 2024

Step 1: Calculate year-to-year development factors

Development Factors
Months	Factor
12-24	(6,700 + 7,300)/(5,250 + 5,250) = 1.3333
24-36	7,500/6,700 = 1.1194

Step 2: Calculate expected losses for each accident year

Expected Loss
Accident Year	Expected Loss
AY2	10,000 *0.72 = 7,200
AY3	11,500 * 0.75 = 8,625

Step 3: Calculate the reserves for each accident year using the Bornhuetter-Ferguson method

Accident Year	Expected Loss	Cumulative Development Factor	Reserve
AY2	7,200	1.1194	(1-1/1.1194)*7,200 = 767.98
AY3	8,625	1.3333 * 1.1194 = 1.4925	(1-1/1.4925)*8,625 = 2,846.11
			Total: 3,614.09

@@ Line 27: / Line 27: @@
 {| class="table table-bordered"
-|+ Expected Loss
 |-
 ! Accident Year !! Expected Loss !! Cumulative Development Factor  !! Reserve
 |-
-| AY2 || 7,200 ||1.3333 * 1.1194 = 1.4925
+|AY2 || 7,200 ||1.1194 || (1-1/1.1194)*7,200 = 767.98
-  || (1-1/1.4925)*7,200 = 2,375.88
 |-
-| AY3 || 8,625 ||1.1194 || 8,625 * (1-1/1.1194) = 919.98
+|AY3 || 8,625 ||1.3333 * 1.1194 = 1.4925 || (1-1/1.4925)*8,625 = 2,846.11
 |-
-|  || || || '''Total: 3,295.86'''
+|  || || || '''Total: 3,614.09'''
 |}