Schedule P: Updating Parts 2 & 3
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Update Schedule P, Parts 2 & 3 for the new calendar year. (See 2016.Spring #12)
Part 2: Incurred Net Loss & DCC at YearEnd
AccYr 
CY2 
CY1 
CY 
prior 
 
 
 
AY1 

 
 
AY 


 
NEW Part 2: (Don't use commas!)
Part 3: Cumulative Paid
AccYr 
CY2 
CY1 
CY 
prior 
 
 
 
AY1 

 
 
AY 


 
NEW Part 3: (Don't use commas!)
Part 4: Bulk & IBNR
AccYr 
CY2 
CY1 
CY 
prior 
 
 
 
AY1 

 
 
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 AY1 paid from CY1 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 AY1 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 YearEnd
AccYr 
CY1 
CY 
CY+1 
prior 
 
 
 
AY 

 
 
AY+1 


 
NEW Part 3: Cumulative Paid
AccYr 
CY1 
CY 
CY+1 
prior 
 
 
 
AY 

 
 
AY+1 


 
intermediate step: updated unpaid (add to NEW Part 3 to get NEW Part 2)
AccYr 
CY1 
CY 
CY+1 
prior 
 
 
 
AY 

 
 
AY+1 


 