CIA Runoff

Question 1

How to determine Excess (Deficiency)

Answer 1

(Discounted runoff) + (II during t on unpaid claims)

Question 2

How to calculate discounted runoff

Answer 2

(discounted claims liab at t-1) – (paid losses during t) – (discounted claims liab at t)

Question 3

How can be obtained the investment income (II) attributable to policy liabilities

Answer 3

(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,

Question 4

What does excess/deficiency ratio say ?

Answer 4

Indicates the adequacy of reserves at time (t-x)

Question 5

Basic approaches to the evaluation of runoff of claim liabilities : Undiscounted basis

Answer 5

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)

Question 6

How to calculated excess/(deficiency) ratio

Answer 6

excess(deficiency) / opening reserve

Question 7

Choice between Undiscounted basis formulas depends on:

Answer 7

1 - Available data
2 - Regulatory requirements
3 - Management requirements

Question 8

How to determine Discounted claims liabilities ?

Answer 8

UCAE + IBNR