Fall 2016 #26
Hello,
When making the net paid triangle, i took the direct paid triangle * (1-qs%)/qs%. So net and gross were the same other than 2014 at 24 mons. Why does the answer key say it is 500?
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Hello,
When making the net paid triangle, i took the direct paid triangle * (1-qs%)/qs%. So net and gross were the same other than 2014 at 24 mons. Why does the answer key say it is 500?
Comments
net paid triangle = direct paid triangle * qs%
In commutation, reserves, not paids, are commuted back to the insurer.
But the price of the commutation reduces the insurer's paid loss, at the point when it is paid to the insurer.
So, net paid triangle after commutation is:
1000.5 2000.5-700
1000*.5
Here it is again:
1000 X .5 2000 X .5 - 700
1000 X .5
thank you. this helped me realize that the triangle given in the template is ceded and this one is direct. appreciate it
Sure, good luck.