timed out BattleActs100

Commutations: Adjusting Triangles (part 2)

myID_+ priorDate_+ record_+ WET_+ fadeFactor_

The insurer has decided to commute this contract for policy year PY-2 before the end of the latest calendar year. Calculate the primary insurer's net paid & net ultimate loss triangle after commutation (see 2017.Fall #27b)

  current score:
0.000

quota-share %
commutation price
Primary:  Ceded Pd Losses before commutation
PolYr 12 24 36
PY-2 ---- ---- ----
PY-1 ---- ----
PY ----
Primary:  Net Paid after commutation
PolYr 12 24 36
PY-2
PY-1
PY
Primary:  Net Reserves before commutation
PolYr 12 24 36
PY-2 ---- ---- ----
PY-1 ---- ----
PY ----
Primary:  Net Ultimate after commutation
PolYr 12 24 36
PY-2
PY-1
PY

Hint

The only cells affected by commutation are PY-2 at 36 months.

Net Paid

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

Step 1

Use this formula below to find the net paid triangle before commutation

    net paid = (net ceded) x (1-qs%) / qs%

Step 2

subtract the commutation price from the appropriate cell from Step 1 to find the net paid after commutation

Net Ultimate

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

Step 1

Use the formula below to find the net ultimate triangle before commutation

    net ultimate = (net paid) + (net reserve)

Step 2

Use the formula below to recalculate the appropriate cell from Step 1

net ultimate after commutation = (net paid after commutation) + (net reserve before commutation) + (ceded reserve before commutation)

Step i.1:  Net Paid before commutation
PolYr 12 24 36
PY-2 ---- ---- ----
PY-1 ---- ----
PY ----
Answer to (i)
Step i.2:  Net Paid after commutation
PolYr 12 24 36
PY-2 ---- ---- ----
PY-1 ---- ----
PY ----
Step ii.1:  Net Ultimate before commutation
PolYr 12 24 36
PY-2 ---- ---- ----
PY-1 ---- ----
PY ----
Answer to (ii)
Step ii.2:  Net Ultimate after commutation
PolYr 12 24 36
PY-2 ---- ---- ----
PY-1 ---- ----
PY ----