Spring 2017 #11
I am having difficult time trying to understand 60.30 (I-M) even trying to read exam report 2 times.
Could someone please walk me through calculation from I to M in a "simpler" term? or maybe i am having near-exam anxiety syndrome LOL
Letter K and M is alright.
but i cant seem to differentiate between I, J and L
Comments
Hi,
I: This is basically H just one year back. That is why they are telling you to take the second latest diagonals. Just pretend the latest diagonals doesn't exist and do the same thing you would do for H.
J: They are asking you for Calendar Year net paid losses
L: This is the current unpaid claims excluding the latest AY. We need to exclude the latest AY because we want to calculate the XS/deficiency -> The latest AY will not have a value for AY - 1.
Think of this question in terms of calculating the XS or deficiency ratio. How would you approach it? You would need to find the beginning unpaid and the ending unpaid. Now, based on what you have done in the past for similar questions, what does I,J and L represent? This is actually easier than regular XS/deficiency ratio questions because they hold your hand step-by-step once you realise what each of the letters mean.
Basically, to calculate XS/deficiency excluding investment income, you need:
I (last CY unpaid) - L (this CY unpaid) - J( this CY paid) = XS/Deficiency
Then what is the difference between J and D?
So "Margin or Deficiency for Unpaid Claims at Prior Year End" - From I to J - intuitively does it mean: calculating the excess ratio using data as of December 31, 2016, BUT excluded the AY 2016 data?
D includes the paid for the most recent AY while J does not. J specifically mentions it is paid claims for prior years
Yes to your second question, well for XS/Deficiency questions we never include the latest AY data