CIA Runoff Flashcards
How to determine Excess (Deficiency)
(Discounted runoff) + (II during t on unpaid claims)
How to calculate discounted runoff
(discounted claims liab at t-1) – (paid losses during t) – (discounted claims liab at t)
How can be obtained the investment income (II) attributable to policy liabilities
(Yield Rate) x (Average Policy Liabilities)
APL = Net Unpaid Claims + Net Unearned Premium – Gross DPAC + Premium Deficiency Provisions + Unearned Commissions – Agents, Brokers and PH's Receivables – Installment Premiums,
What does excess/deficiency ratio say ?
Indicates the adequacy of reserves at time (t-x)
Basic approaches to the evaluation of runoff of claim liabilities : Undiscounted basis
i. (ultimate amounts estimated at t-1) – (ultimate amounts estimated at t)
ii. (claims liabilities at t-1) – (paid losses during t) – (claims liabilities at t)
How to calculated excess/(deficiency) ratio
excess(deficiency) / opening reserve
Choice between Undiscounted basis formulas depends on:
1 - Available data
2 - Regulatory requirements
3 - Management requirements
How to determine Discounted claims liabilities ?
UCAE + IBNR