Concept Comparison

thesuperactuary

What is the difference between Net Liabilities vs. Net Unpaid Claims and Adjustment?

I understand that Total Liabilities = Total Unpaid Claims and Adjustment + Total Unearned Premium

=> Hence Net Liabilities = net unpaid claims and adjustment + net unearned premium
For question 13, spring 2017, i can't seem to reconcile the number here:
For the current year:
Net liabilities (derived from Net Leverage Ratio) = 34,000
Net Unpaid Claims and Adjustment expense (from the table) = 35,000
Changes in unearned is 1,200?

Am i missing anything here?

Thank you!

Staff_T2

Hi,

The table is showing the Net Claims and Adjustment Expense not the Net Unpaid Claims and Adjustment Expense which is what you need. NCAE(X) = NUCAE(X) - NUCAE(X-1) + Net Paid(X); Where X is the current year. You also do not have the net unearned premium for year X in the problem but rather the change in net unearned premium. Hope this helps!