Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

2. Apply the loss development factors and determine the estimated teltimate losses, Year Months Total Incurred Losses Loss Development Factor Estimated Ultimate Incurred Losses 2014

image text in transcribed
image text in transcribed
2. Apply the loss development factors and determine the estimated teltimate losses, Year Months Total Incurred Losses Loss Development Factor Estimated Ultimate Incurred Losses 2014 2015 2016 2017 2018 66 54 42 30 18 3. Due to inflationary expectations, the cost to settle these claims is expected to increase by 3% each year, Apply the following trend factors each year to the loss data. Record your answers in the table below Estimated Trend Ultimate Adjusted Total Factor X Losses Incurred Losses 2014 1.16 2015 1.13 2016 1.09 2017 1.06 2018 1.03 Loss per 4. If total adjusted sales are as follows, calculate the loss per $1,000 of sales. Interpret and evaluate your findings. Adjusted Adjusted Losses ($) Sales (5000) $1,000 of sales 2014 $55,000 2015 S64,300 2016 $73,460 2017 $81,235 2018 $98,786 Average: Assume the following products liability losses for Hawk Manufacturing Company Accident Year 18 30 42 54 66 2014 $30,000 $43,000 $58,000 $75,000 $83,700 2015 $43,600 $54,500 $69,800 $87,000 2016 $56,400 $78,300 $99,500 2017 $75,600 $105,800 2018 $130,000 2. Apply the loss development factors and determine the estimated teltimate losses, Year Months Total Incurred Losses Loss Development Factor Estimated Ultimate Incurred Losses 2014 2015 2016 2017 2018 66 54 42 30 18 3. Due to inflationary expectations, the cost to settle these claims is expected to increase by 3% each year, Apply the following trend factors each year to the loss data. Record your answers in the table below Estimated Trend Ultimate Adjusted Total Factor X Losses Incurred Losses 2014 1.16 2015 1.13 2016 1.09 2017 1.06 2018 1.03 Loss per 4. If total adjusted sales are as follows, calculate the loss per $1,000 of sales. Interpret and evaluate your findings. Adjusted Adjusted Losses ($) Sales (5000) $1,000 of sales 2014 $55,000 2015 S64,300 2016 $73,460 2017 $81,235 2018 $98,786 Average: Assume the following products liability losses for Hawk Manufacturing Company Accident Year 18 30 42 54 66 2014 $30,000 $43,000 $58,000 $75,000 $83,700 2015 $43,600 $54,500 $69,800 $87,000 2016 $56,400 $78,300 $99,500 2017 $75,600 $105,800 2018 $130,000

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Accounting questions