2019 Question 14 part d Sample 2
I don't understand why in the Sample 2 answers the values in the Incurred triangle are never used? It even says "using the traingle" but then the values in the "annual statement" table are used. Here's what I would do:
-use the triangle to get the incremental development within each calendar year for CY 2015 and 2016
-then, add on the one-year and two-year developments and then divide by the EP for 2015 and 2016
-Take the average of those two "reserves-to-premium" ratios.
-Multiply by the current year EP.
-Subtract by the current year reserves to get the deficiency/redundancy.
-divide by current year surplus.
Is this correct? Can the triangle values be used for anything in this problem (part d)?
Comments
I don't see anything being done differently in sample 2 than in sample 1.
You cannot get the reserve values you need from the incurred triangle alone; you would need the paid triangle alongside, which is not given here.