Fall 2017 Question 11 Variant

Turley36Turley36
in Odomirok.15-P

For part A) I have memorized that this is asking for the 2016 CY paid loss and dcc+ the change in (part 2 - part 3 - part 4) for 2016 CY, but I am worried there is a scenario where they could ask for 2016 CY loss and dcc + the change in (part 2 - part 3) for 2016 CY. Is that possible? If so, would the distinction there be "case incurred" versus just "incurred"?

I guess I just want to make sure I have a better understanding of why we wouldn't include the change in Bulk and IBNR reserves.

Comments

  • grahamgraham

    I suppose that could be asked. The quantity (part 2 - part 3) would be case+IBNR so in my own mind, I'd think of it as "case+IBNR" incurred loss although just calling it "incurred" loss also seems reasonable. In the actual exam problem they specifically wanted the case value so they had to explicitly say "case".

    I don't know if there's a specific reason this problem asked only for case incurred, other than it answers specifically how much of the total reserve change is due to a change in case reserves. Case and IBNR are separate items because case reserves are set up when a claim is reported but IBNR is determined by the actuary at year-end (or quarter-end). You might want to how much of the change in reserves is due solely to changes in case reserves versus changes in IBNR reserves.

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