Exam 5 Reserving: Terminologies Flashcards
insurer
risk bearer
reserve
an amount booked in a financial statement
unpaid claim estimate
actuary’s estimate of the obligation for further payment
unpaid claim estimate analysis
process of developing an unpaid claim estimate
carried reserve
The carried reserve for unpaid claims is the amount reported in a published statement or in an internal statement of financial condition
Five components of unpaid claims estimate
- Case outstanding
- Provision for future development on known claims
- Estimate for reopened claims
- Provision for claims incurred but not reported
- Provision for claims in transit (incurred and reported but not recorded)
Case outstanding
aka. unpaid case, estimates of unpaid claims for known and reported claims only, do not include future development on reported development on recorded claims
IBNR
Remaining four parts of unpaid claims estimate except case outstanding
Two components of IBNR
- pure IBNR 2. Incurred but not enough reported IBNER, commonly referred to as development on known claims
claims vs. claim counts
claims: dollar value; claim counts: number of claims
reported claim
aka. incurred claims or incurred losses. sum of cumulative paid claims and case outstanding estimates at a particular point in time
Ultimate claims
Total dollar value after all claims are settled and closed without any chance of reopend claims
Claim-related exponses
aka. claim adjustment expenses. sum of ALAE and ULAE, or the sum of DCC and A&O
Experience period
the years included in a specific technique for estimating unpaid claims
emergence
the reporting or development of claims and claim counts over time. In Canada, the rate of payment of ultimate claims
