Exam 5 Reserving: Expected claims technique Flashcards
Most often used method to determine the a prior i expected claims in commercial field
Claim ratio method, where ultimate claims for an experience period are equal to a selected expected claim ratio multiplied by the earned premium
Exposure-based method of determining expected claims
Predetermined exposure based * a selected measure of claims per unit of exposure (known as the pure premium or the loss rate)
Most common exposure base for commercial insurers and reinsurers
Earned premium
Most common measurement of claims
claim ratio
Exposure base for self-insured organizations: U.S. workers compensation
payroll
Exposure base for self-insured organizations: Automobile liability
Number of vehicles or miles driven
Exposure base for self-insured organizations: General liability for public entities
Population or operating expenditures
Exposure base for self-insured organizations: General liability for corporations
Sales or square footage
Exposure base for self-insured organizations: Hospital professional liability
Average occupied beds and outpatient visits
Exposure base for self-insured organizations: property
Property values
Exposure base for self-insured organizations: Crime
Number of employees
Expected claims for self-insurers
exposure * a pure premium per unit of exposure
on-level premiums
Earned premium which account for rate changes implemented during the nine-year experience period
trend
inflation and other systematic influences on the claims or premiums or both
Tort reform adjustment
because states and provinces need to make legislate changes to the legal environment for lawsuits arising out of private passenger automobile accidents
