ASC 331 – POLICY AND CLAIM DATA

Arthapas Cheuasangpun
Assistant Director
Actuarial Department
Tokio Marine Safety Insurance (Thailand) PCL

Msc., Pgdip (Merit), The University of Kent, UK 1st February 2020

Agenda
1. Policy Data

2. Claim Data
1. Policy Data

3
Calendar year VS Policy year

• As we rely historical data for both ratemaking and reserving, obtain and
understand the data is very important for actuaries
• Suppose that the policy effective date is 10/1/2014, we need to
understand calendar and policy year as graphically shown below:

4
Calendar year – Calculating %Earned

• Suppose we are given further information that the policy premium is

$1,200, we can determine earned premium for each calendar year.
• What is CY2014 earned premium?

5
Calendar year – Unearned relationship

• Valuation date:
– Any coverage provided prior to the valuation date will have been earned, while any
coverage expected to be provided after the valuation date will be unearned.
• If valuation date is 3/31/2015, what is the unearned premium for CY2015?

• Relation between Written, Earned and Unearned

– Written Premium = Earned Premium + Change in Unearned Premium
– Written Exposures = Earned Exposures + Change in Unearned Exposures
6
Policy year – Calculating %Earned

• As of 3/31/2015, what is PY2014 earned premium?

• As of 10/1/2015, what is PY2014 earned premium?

7
In-force policy

• Given policy premium is $1,200,

– what is in-force premium as of 7/1/2014?
– What is in-force premium as of 7/1/2014?

8
Calendar year - Example

200 0 0

0 250 0

0 300 0

0 400 0

0 3 50 0
0 0 225
200 1 3 00 225

50 150 0

0 250 0
0 225 75
0 200 200
0 87.50 262.50
0 0 22 5
50 912.50 762.5①

9
In-Force policy - Example

11
Example #1

05/01/04
MV

|
๛
11/01/04

ตํ่
12131 / 01
เข้า
แำตนิ้
µµ
ษั่"ณุ๋ 104

|
✓ v ✓

ง
0

× ×

8/12
}
2 ×
=
1.333
= 1.5
1^2/12 =
แ 6ๆ

13
Example #2

1. Calculate the total calendar year 2007 written premium.

2. Calculate the total calendar year 2008 earned premium.

3. Calculate the total policy year 2007 earned premium as of March 31, 2008.

4. Calculate the total in-force premium as of July 1, 2008.

14
QUIZ #1

15
2. Claim Data

16
Claim data

• This is the data captured from claims process

• There are 2 major categories of claim data

1. Losses: The amounts paid or payable to claimants for claims on insurance
policies. ไม่ จ่าย แต่ กำลัง จะ จ่าย
2. Loss Adjustment Expenses (LAE): The costs for an insurer in handing claims
p
ค่าแในการผิด หลบ
and can further split into ALAE and ULAE as mentioned earlier.
๗ ๗

• During the claim process, there are many types of tractions generated in
claim database:
• A new claim being opened • A loss payment being made
• An initial loss case reserve being established • An ALAE ( 1
payment being made
สิทธิ์ ฝั่ง ถูก
สวม

• An initial ALAE case reserve being established • Subrogation being recovered

• A loss or ALAE case reserve being changed • A claim being closed
• A claim being re-opened
17
Claim data – Aggregation

Amount จำนวน เงิน

-

• Paid Losses
• Reported Losses

Count → จำนวน เคลม

แบบ
¥ ไม่
ต้อง จ่าย เคลม

• Reported claim counts มี สา มา กี่ หน

ฯลฯ

• Open claim counts

• Closed claim counts
• Closed with pay claim counts
• Closed without pay claim counts ( อ มา แล้ว ขับ
.
ไม่เข้า เงื่อนไข ไม่ ต้องจ่าย )
• Reopened counts:
– Note that a complication arises when counting closed claims on claims that have been re-
opened and re-closed, possibly multiple times.
– Claims can also close without pay, only to be re-opened and closed with pay.
– Different insurers may address this issue differently.

18
Claim data – Aggregation
ห มา นาน เอาไพ่
Repend นับ เป็น นาม ทิม
-

การนับ
\
Reopened counts: mn

– Note that a complication arises when counting closed claims on claims that have been
re-opened and re-closed, possibly multiple times. Claims can also close without pay, only
to be re-opened and closed with pay. Different insurers may address this issue
differently.
– As an example,
• Suppose a claim is reported and opened on 7/1/2012, closed on 7/1/2013, re-
opened on 10/1/2013, and then finally closed again on 3/1/2014.
• If you are counting closed claims on a calendar year basis, you may count this same
claim twice; once in CY 2013, and once in CY 2014.
• Some insurers might address this by either avoiding counting claims on a CY basis,
by re-stating the history to only count the first or latest time the claim was closed,
or by treating re-opened claims as new claims.

19
 Example
i)
on claim transactions
ก (a)
( ( H

lir.ee/ ✓

✓
×

เงา
r

งุ๋ฐํ๋ฬุ๋+
C- ต sasereserne
Based on above information, determine the following: Claim

0
daim Ending $ $
|
กฺ๚ฑุ๊; /
1 → END 0

|
=

1 2,500
• CY 2010 PaidกำไรLosses $ 21,000
→ =

↳ ↳ BGN =
$ 4 500
Bginning -
$ mooo
Change $ → = -

2,500
กระทบ กับ บริษัท Change #
→ กคg ,

• CY 2010 Change in Case Reserves

=
500
"

i.
"
" "

: • CY 2010 Reported Losses

- การ

.
..

• AY 2009 Paid Losses as of 12/31/2010 0 * 1k +7k $ 8,000

=

• AY 2009 Reported Losses as of 12/31/2010

• AY 2009 Reported Losses as of 12/31/2011
• RY 2009 Reported Losses as of 12/31/2011
1kt 7kt 5kt 8k $ 21,000 -

• PY 2009 Paid Losses as of 12/31/2010

20
 Example on claim transactions
Based on information on previous slide, fill in the table below
หา
reportedhrss Endingba Reseme ✓% ษู๊
( วันที่ คาด การรับ

ญื๋ฬุ๊ฑืมู๋
(แ /19 /นoแ รู้ข้อมูล )

|
1
10,000 ำ 000 10000
paid
Trmsactmt Acc -

10,000 Hoo-7ooo-tsl.io o =
10,5น
1 10 00

Rep 10,000 u - n
10,500 11,000
Pdi 2$ 000
10,000 มา 500

ฮื๋
-
-2,500
-

0
_

0
-

-
ns

f-
-

20 10:10 00+7000

ฐื๊
ะ สึ๋
21 si ฐื่
ฐิ๋ไร
"

↳ paid + changeinasereserve "

Example #1

23
Example #2

25
Example #3

27
Example #4

29
Example #5

31
Example #6

33