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- TIA EXAM 5 - FRIEDLAND CH 01
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To whom is it important that we accurately estimate unpaid claims?
1. Internal Management
2. Investors
3. Regulators
4. State Law
5. NAIC
Importance of accurately estimating unpaid claims for
Internal Management
Internal management
Influences pricing
Influences decision making:
UW - increase business, exit market
Strategic - reinsurance needs
Financial - capital management
Importance of accurately estimating unpaid claims for
Investors
Investors
Can cause misstated balance sheet & income statement
Misleading financial metrics
Importance of accurately estimating unpaid claims for
Regulators
Regulators
Rely on financial statements to supervise
Misstatement of true financial position can delay regulators intervention/help
Ranges of unpaid clm estimates
Different methods produce varying estimates
Balance sheet requires point estimate (some require 75% confidence level)
Define an Actuarial central estimate
Actuarial central estimate
: expected value over the range of reasonably possible outcomes
Define Insurer
Risk bearer for P&C exposures
Define Reserves
Amount booked in a financial statement
Define Unpaid Claim estimate
Actuary's estimate of the obligation for future payment resulting from clms due to past events
Define Carried Reserve
Carried reserve
: amt reported in a published statement
5 components of unpd clm estimate
Case outstanding on know clms
Prov for future dvpmt on know clms
Estimate for reopened clms
Prov for clms IBNR
Prov for clms in transit
IBNR claims are often split into two components.
What are they are why is this done?
1. IBNYR (pure IBNR)
2. IBNER (aka development on known claims
Separated to test adequacy of Case O/S over time
Author
CDP
ID
66022
Card Set
- TIA EXAM 5 - FRIEDLAND CH 01
Description
FRIEDLAND CH 01
Updated
2011-02-13T16:53:13Z
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