Hope this helps.
-Mel
On Wed, 05 Aug 1998 11:46:05 -0700 (PDT) "J.T. Grimes"
<jtgrimes@yahoo.com> wrote:
> I'm trying to work through the exhibits in the BS paper and I'm stuck
> on Exhibit F (Adjusted incurred).
>
> It seems to me that the obvious way to adjust the outstanding reserves
> would be to take the original exhibit (B) and multiply by 1.15 ^ age
> (where the age of the most recent diagonal is 0, last years
> diagonal=1, etc.), multiply by the number of claims, then add the
> losses.
>
> This doesn't work.
>
> The sentence "the year-end 1976 average reserve was reduced by 15% per
> year ..." seems to indicate how things should be done, but I can't
> make much sense of it, at least not in any way that brings me to the
> figures in Ex. F.
>
> Am I missing something obvious? Being stupid? Can it not be derived
> from the information given? Can I quit studying yet?
>
> Many thanks,
>
> J.T.
>
>
>
>
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----------------------
Mel Appenzeller
Mel.J.Appenzeller@EMCIns.com