3rd Calculation example
In the model problem 2016.Spring #12, I think in Step 1, the 3rd calculation should be solving for (AY, CY) not (NEW prior, CY+1)
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In the model problem 2016.Spring #12, I think in Step 1, the 3rd calculation should be solving for (AY, CY) not (NEW prior, CY+1)
Comments
Yup, thanks! I have corrected it.
Why is the CY-1 cumulative paid for prior years (the top left corner of the part 3 triangle) always equal to 0?
Here's the excerpt from Odomirok p179:
". . . The prior row for Part 3 also provides cumulative paid data; however, it does not start with the cumulative payments from the first year that the company wrote business. Rather, it shows the payments that have occurred on loss and DCC reserves as of the earliest evaluation date in the table, for all prior accident years. ****Only payments made subsequent to the establishment of reserves as of the earliest evaluation date in the table are shown****. . . . "
For Sch P Part 3, the choice was made to show only the accumulation of paids since the earliest statement of reserves. Earliest statement of reserves is as of 12 months of the prior years. So, paids for the 0-12 period of the prior years are not shown.