Friedland13.BerqSherm

Reading: Friedland, J.F., Estimating Unpaid Claims Using Basic Techniques, Casualty Actuarial Society, Third Version, July 2010. The Appendices are excluded.

Chapter 13: Berquist-Sherman Methods

Pop Quiz

• What are the best 3 diagnostic triangles to look at for evidence of changes in case reserve adequacy. (Hint: See Chapter 6 (Diagnostics) - Changes in Case Reserve Adequacy)
• What are the best 3 diagnostic triangles to look at for evidence of claim settlement rate. [Hint: See Chapter 6 (Diagnostics) - Changes in Settlement Rate)
• BONUS: For an increase in case reserve adequacy and an increase in claim settlement rate, do the diagnostics show increases or decreases down columns?

Click for Answer 

BattleTable

Based on past exams, the main things you need to know (in rough order of importance) are:

• reported Berquist-Sherman method - calculate ultimate / unpaid / IBNR
• paid Berquist-Sherman method - calculate ultimate / unpaid / IBNR

reference	part (a)	part (b)	part (c)	part (d)
E (2019.Fall #21)	reported BS: - calc unpaid
E (2019.Spring #14)	accuracy of paid devlpt: - evaluate
E (2019.Spring #22)	reported BS: - calc ultimate
E (2018.Spring #21)
E (2017.Fall #24)	reported BS: - calc IBNR	alternate method: - propose & justify
E (2017.Spring #22)	paid BS - claim count adjustment
E (2016.Fall #23)	reported BS, BF - calc unpaid
E (2016.Spring #20)	paid BS - calc ultimate
E (2016.Spring #21)	Friedland06.Diagnostics	ultimate: - suggest method
E (2015.Fall #21)	paid BS - disposal rate	paid BS - distortion
E (2015.Spring #22)	impact: - settlement rate change	response: - to settlement rate change	related methods: - rptd B-S, rptd devlpt
E (2015.Spring #23)	evaluate methods: - paid & rptd devlpt	adjustment to method: - propose & justify
E (2014.Fall #20)	reported BS, paid BS - calc ultimate
E (2014.Spring #18)	ultimate: - select & apply 2 methods
E (2013.Fall #6)	reported BS: - calc ultimate 1
E (2013.Fall #21)	paid BS - calc ultimate
E (2013.Fall #23)	operational change: - explain	investigating the change: - questions for clms mgmt 2	diagnostics: - to check results 3
E (2013.Spring #23)	reported BS: - adjust rptd triangle	compare IBNR: adjusted vs unadjusted

¹ This question requires knowledge of pricing. You may need to come back to it later if you haven't covered the pricing material yet.

² See Chapter 4 - Meetings for potential questions.

³ Review Chapter 6 - Diagnostics but note that valid answers can include diagnostics other than those specifically discussed in chapter 6.

POP QUIZ ANSWERS

• To detect changes in case reserve adequacy the best 3 diagnostics to look at are:

→ paid/reported loss, average reported loss, average case O/S loss

• To detect changes in claim settlement rate the best 3 diagnostics to look at are:

→ paid/reported loss, paid/reported counts or average case O/S loss

• BONUS: For an increase in case reserve adequacy and an increase in claim settlement rate, green font indicates an increase down columns in the diagnostic triangles and red font indicates a decrease.

Go back