Reasons to choose a margin of MfAD(clms) at 20% or HIGHER
Hi,
the reasons for selection at 20% or at higher than 20% are put into 2 battle cards and are different, are these reasons all valid for either question? (answers interchangeable?) or we have to be very specific for the 2 questions
Reasons to choose a margin of MfAD(clms) HIGHER than 20%
• if there is unusually high uncertainty
• if PfAD is already very low because best estimate of claims liability is very low
• if a stochastic analysis indicates variability not identified using a deterministic analysis
Reasons to choose the highest margin of MfAD(clms) = 20%
• for significant changes: (tort reform, legal challenges)
• for a new LOB in new province with limited data
• for an increase in retentions with limited data for assessing effect
Thanks,
Comments
I would say they are probably valid for either question