Policy Year Data Disadvantage

samedi 14 février 2015

ALRIGHT. Can someone verify my logic? I'm trying to spell everything out as clearly and exactly as I can in my mind.



Also, is there any disadvantage to PY data as a result of PY premiums being less responsive or mature relative to the other methods? I've only explained (hopefully correctly) the disadvantage of PY data as a result of PY losses.



My answer to the question: what is the disadvantage to PY data relative to CY and CY/AY data?



PY data is less responsive

b/c => it takes longer to become available

b/c => losses takes longer to be reported

b/c => assuming annual policies, it takes up to 2 years from the beginning of the policy year for all PY losses to occur

b/c => it takes up to 2 years from the beginning of the policy year for all PY policies to expire

b/c => it takes up to 1 year from the beginning of the policy year for all PY policies to be written



PY data is less mature

b/c => losses takes longer to develop

b/c => losses take longer to be reported

b/c => see logic in the section above





Policy Year Data Disadvantage

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