exercise:F65383a2a3: Difference between revisions
From Stochiki
(Created page with "You are given: #Earned premium in CY1 was 500,000. #Earned premium growth through CY3 has been constant at 10% per year (compounded). #The expected loss ratio for AY1 is 40%. #As of December 31, CY3, the expected loss ratio has increased 3 percentage points each accident year #Selected incurred loss development factors are as follows: {| class = "table table-bordered" | 12 to 24 months | 1.25 |- | 24 to 36 months | 1.2 |- | 36 to 48 months | 1.1 |- | 48 to 60 month...") |
No edit summary |
||
| Line 27: | Line 27: | ||
|} | |} | ||
Calculate the | Calculate the total IBNR reserve as of December 31, CY3 using the Bornhuetter-Ferguson method. | ||
Revision as of 22:03, 22 October 2024
You are given:
- Earned premium in CY1 was 500,000.
- Earned premium growth through CY3 has been constant at 10% per year (compounded).
- The expected loss ratio for AY1 is 40%.
- As of December 31, CY3, the expected loss ratio has increased 3 percentage points each accident year
- Selected incurred loss development factors are as follows:
| 12 to 24 months | 1.25 |
| 24 to 36 months | 1.2 |
| 36 to 48 months | 1.1 |
| 48 to 60 months | 1.07 |
| 60 to 72 months | 1.05 |
| 72 to ultimate | 1.000 |
Calculate the total IBNR reserve as of December 31, CY3 using the Bornhuetter-Ferguson method.