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Schedule P: Updating Parts 2 & 3

myID_+ priorDate_+ record_+ WET_+ fadeFactor_

Update Schedule P, Parts 2 & 3 for the new calendar year. (See 2016.Spring #12)

  current score:
0.000

Part 2:  Incurred Net Loss & DCC at Year-End
AccYr CY-2 CY-1 CY
prior ---- ---- ----
AY-1 ---- ----
AY ----
NEW Part 2:    (Don't use commas!)
AccYr CY-1 CY CY+1
prior
AY
AY+1
Part 3:  Cumulative Paid
AccYr CY-2 CY-1 CY
prior ---- ---- ----
AY-1 ---- ----
AY ----
NEW Part 3:    (Don't use commas!)
AccYr CY-1 CY CY+1
prior
AY
AY+1
Part 4:  Bulk & IBNR
AccYr CY-2 CY-1 CY
prior ---- ---- ----
AY-1 ---- ----
AY ----
New CY Information:  
AccYr Paid IBNR Case
prior ---- ---- ----
AY ---- ---- ----
AY+1 ---- ---- ----

A

Calculate Part 3 first and use this important fact:

The amounts in the prior year row in Part 3 are defined to be the amounts paid since the end of the year in the first column.

That means the top left corner of the Part 3 triangle, will be 0.
(Prior and AY-1 paid from CY-1 column need to be backed out of NEW prior.)

Step 1

drop the oldest CY column

sum the 2 oldest AYs into the NEW prior year row

Step 2

add the given new CY+1 paid amounts to the NEW CY column to get the NEW CY+1 column

Step 3

back out the prior and AY-1 paid from the entire NEW prior row. Part 3 is DONE!

B

Now we can calculate the NEW Part 2 following the steps below:


Step 1

original unpaid triangle = (original part 2) - (original part 3)

Step 2

calculate NEW unpaid triangle following the pattern of Step A.1 from A above.

Step 3

NEW Part 2 = (NEW unpaid triangle) + (NEW paid triangle)

(where the NEW paid triangle is the NEW part 3 that we already calculated)

Solution:
NEW Part 2:  Incurred Net Loss & DCC at Year-End
AccYr CY-1 CY CY+1
prior ---- ---- ----
AY ---- ----
AY+1 ----
NEW Part 3:  Cumulative Paid
AccYr CY-1 CY CY+1
prior ---- ---- ----
AY ---- ----
AY+1 ----
intermediate step:  updated unpaid
 (add to NEW Part 3 to get NEW Part 2)
AccYr CY-1 CY CY+1
prior ---- ---- ----
AY ---- ----
AY+1 ----