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3tac
04-20-2006, 07:01 PM
Having trouble understanding this one. See below.

Specifically, I don't understand where reserves are flowing through here, per the solution, that results in the positive income.

I am troubled by the CF exhibit in general, in that I haven't seen any of the papers fully describing it's "flow".

Thoughts?
miaomiao
04-20-2006, 07:25 PM
Having trouble understanding this one. See below.

Specifically, I don't understand where reserves are flowing through here, per the solution, that results in the positive income.

I am troubled by the CF exhibit in general, in that I haven't seen any of the papers fully describing it's "flow".

Thoughts?

no, reserves are not flowing through here. it is saying if you paid a huge loss, CF is negative, and the reserve decrease is bigger than the paid losses, which means that incurred loss is negative in this period. then you have a positive income
3tac
04-20-2006, 08:57 PM
no, reserves are not flowing through here. it is saying if you paid a huge loss, CF is negative, and the reserve decrease is bigger than the paid losses, which means that incurred loss is negative in this period. then you have a positive income

ok, I follow you up to the last sentence. How are you going from negative incurred loss to a positive income?

I need a break!
glad
04-20-2006, 09:57 PM
ok, I follow you up to the last sentence. How are you going from negative incurred loss to a positive income?

I need a break!

Income equals

Revenue (earned premium)

minus

expense (Incurred loss)

so if incurred loss is negative, it causes income to go up.

I need a break too. this is too much. I feel like I know less and less with every passing day.
Colymbosathon ecplecticos
04-20-2006, 10:02 PM
Of course it does. Last year you owed $1 million, today you owe only $900,000. You are $100,000 better off than before (same as income.)
3tac
04-20-2006, 10:59 PM
Income equals

Revenue (earned premium)

minus

expense (Incurred loss)

so if incurred loss is negative, it causes income to go up.

I need a break too. this is too much. I feel like I know less and less with every passing day.

That clears it up. Thanks!

PS - We just gotta hang in there a couple more days...the final push is on and then it's BREAK TIME!!!:toast:
great3981
04-21-2006, 09:12 AM
US Eastern Time Zone down to 96 hours!