1999 #62

[actuaryshmactuary]

This problem is located in TIA Chapter 15 of the Friedland study manual.

You are given a reported claims triangle, expected claims for each AY, and asked to calculate the amount of IBNR expected to emerge in the next CY.

The solution calculates IBNR as (Expected Claims - Latest Diagonal). When I did this problem, I calcluated ATA's and used Reported Claims x (ATU - 1) to calculate IBNR.

The reason I am confused is that the problem states that claims are fully developed at AY+3, but the Expected Claims amount for the oldest year is greater than the latest diagonal amount, at AY+3, for that particular AY, implying that there is still IBNR.

Would I lose points on this problem if I had calculated IBNR as stated above vs. Expected - Latest Diagonal?