2015 spring 18

daviddavid
in F-08-ExpectedClms

To calculate the trend factor piece in the expected claims technique, can I understand that the trend period should be from the AY to the year whose ultimate claims are being estimated? So for AY 2014, the trend period should be 1 year to AY 2015 instead of 0 years, even through the 2014 is the latest data?

Thanks in advance.

Comments

  • GrahamGraham

    That's essentially correct. In the ECR problems, the losses are trended from mid-year to mid-year so the exponents are integers. If we want to estimate 2015, then we need to bring the losses up to the 2015 level. That means AY 2014 is trended 1 year to get to 2015. Similarly, AY 2013 is trended 2 years to get to 2015, and so on.

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