Actuarial Outpost Feature Forecast
 Register Blogs Wiki FAQ Calendar Search Today's Posts Mark Forums Read
 FlashChat Actuarial Discussion Preliminary Exams CAS/SOA Exams Cyberchat Around the World Suggestions

 Not looking for a job? Tell us about your ideal job, and we'll only contact you when it opens up. https://www.dwsimpson.com/register

#1
06-04-2013, 05:03 PM
 mehul187 CAS SOA AAA Join Date: Apr 2012 Location: Texas Studying for MLC College: University of Texas at Austin Posts: 12
Feature Forecast

My boss wants me to put together a forecast of feature counts for our company (car insurance). We want to predict the number of counts we will receive throughout the year. I have access to things like our company's frequencies, earned car years, policies in force, catastrophe counts, and past feature counts (by coverage/state). He wants me to come up with a few different ways to predict these future counts then pick the one I think is best.

Does anyone have any suggestions on ways I can go about making this forecast?
#2
06-04-2013, 06:50 PM
 Mary Frances Member Join Date: Aug 2002 Posts: 972

#3
06-04-2013, 07:18 PM
 jesusislord Member CAS AAA Join Date: Aug 2006 Posts: 2,787

Quote:
more specifically, friedlands paper.

1. put together a development triangle for claim counts
2. calculate age to age factors and then calculate age to ultimate
3. apply these age to ultimate development factors to known claims counts. age to ultimate factors are selected based on maturity of each accident period.
4. divide the ultimate claim counts by the exposure (for each accident period) that is the best proxy for risk (maybe auto counts or miles driven or earned premium) >>> This is frequency
5. calculate some averages and select a frequency for the upcoming period
6. multiply the frequency by the exposure for the upcoming period >>> future claim count
__________________
God is real and His love is unconditional.
#4
06-04-2013, 09:06 PM
 M^3 Member CAS Join Date: Jun 2010 Posts: 431

What's a "feature" ?
#5
06-05-2013, 11:23 AM
 mehul187 CAS SOA AAA Join Date: Apr 2012 Location: Texas Studying for MLC College: University of Texas at Austin Posts: 12

Quote:
Thank you.

Quote:
 Originally Posted by jesusislord more specifically, friedlands paper. 1. put together a development triangle for claim counts 2. calculate age to age factors and then calculate age to ultimate 3. apply these age to ultimate development factors to known claims counts. age to ultimate factors are selected based on maturity of each accident period. 4. divide the ultimate claim counts by the exposure (for each accident period) that is the best proxy for risk (maybe auto counts or miles driven or earned premium) >>> This is frequency 5. calculate some averages and select a frequency for the upcoming period 6. multiply the frequency by the exposure for the upcoming period >>> future claim count
Thanks, I really appreciate your input. Will definitely look into this.

Quote:
 Originally Posted by M^3 What's a "feature" ?
Sorry, I should have been more clear. By "feature" I was referring to the claim features associated with a claim such as open, reopen, CWOP, CWP, etc.
#6
06-05-2013, 03:20 PM
 Buck Member CAS AAA Join Date: Mar 2005 Posts: 3,773

Get a copy of Annual Statement, find Schedule P, Part 5, Section 3 "reported claims". Then go to Schedule P, Interrogatory, find the question for "claims", or "claimant". If "claimant" had been checked, use Schedule P, Part 5, section 3.

That is a triangle(s). Complete the triangle using standard method. Then find the future calendar year emergence.

"Feature" = claimant count.

Last edited by Buck; 06-05-2013 at 03:58 PM..
#7
06-05-2013, 04:44 PM
 Buck Member CAS AAA Join Date: Mar 2005 Posts: 3,773

You have to understand calendar year versus accident year emergence though, or you won't be able to answer your boss question -- that's why I ask you to talk to an actuary.
#8
06-05-2013, 04:56 PM
 mehul187 CAS SOA AAA Join Date: Apr 2012 Location: Texas Studying for MLC College: University of Texas at Austin Posts: 12

Quote:
 Originally Posted by Buck Get a copy of Annual Statement, find Schedule P, Part 5, Section 3 "reported claims". Then go to Schedule P, Interrogatory, find the question for "claims", or "claimant". If "claimant" had been checked, use Schedule P, Part 5, section 3. That is a triangle(s). Complete the triangle using standard method. Then find the future calendar year emergence. If that sounds too complicated, find an actuary help you out. "Feature" = claimant count.
Thanks Buck.