Subject: Insurance

2. Loss reserves are calculated using the closure method. The triangle for cumulative loss payments is: Accident Development Years Year 0 1 2 3 4 AY1 5000 7000 8000 8800 9800 AY2 6000 9000 10000 11000 AY3 6000 9300 10400 AY4 7500 11000 AYS 8000 The triangle for cumulative claims closed is: 4 Accident Year AY1 AY2 AY3 AY4 AYS Development Years 1 2 3 100 110 115 110 120 125 120 0 70 75 80 85 100 Ultimate 120 135 150 160 180 120 132 120 Losses are mature at the end of year 4. Trend is 4%. Calculate the projected incremental severity for all accident and development years. 2. Loss reserves are calculated using the closure method. The triangle for cumulative loss payments is: Accident Development Years Year 0 1 2 3 4 AY1 5000 7000 8000 8800 9800 AY2 6000 9000 10000 11000 AY3 6000 9300 10400 AY4 7500 11000 AYS 8000 The triangle for cumulative claims closed is: 4 Accident Year AY1 AY2 AY3 AY4 AYS Development Years 1 2 3 100 110 115 110 120 125 120 0 70 75 80 85 100 Ultimate 120 135 150 160 180 120 132 120 Losses are mature at the end of year 4. Trend is 4%. Calculate the projected incremental severity for all accident and development years