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You are using accident year (AY) 2020 losses for the trended and developed loss portion of your ratemaking analysis. The new rate will be in
You are using accident year (AY) 2020 losses for the trended and developed loss portion of your ratemaking analysis. The new rate will be in effect between January 1, 2024, and December 31, 2024. Each policy will have a 12-month term. You are given the following information: - AY 2020 reported losses as of December 31, 2022=$32.5 million. - 24-month-to-ultimate reported Loss Development Factor (LDF) = 1.900 - 36-month-to-ultimate reported LDF=1.500 - Annual loss trend =12%. (a) Find the trended and developed losses for AY 2020. (b) If all policies have a 6-month term (rather than a 12-month term), recalculate the trended and developed losses for AY 2020
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