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# Internation Medical

### International Medical Insurance

Question | Answer |
---|---|

What is IBNR? What is the formula in excel? | Incurred But Not Yet Reported. IBNR = Calculated Ultimate Claims - Sum of Total Paid Claims (Or Sum of Total Reported Claims) |

What is Frequency and Severity? What are the formulas in excel? | Frequency - rate at which claims occur (how often a claim is incurred) # of claims/# of exposures Severity - measure of of the avg. cost of a claim Total losses/# of claims |

What is Premium Cost? AKA Loss Cost or Burn Cost? What is the formula in excel? | Measure of the avg. loss per exposure Total losses/# of exposures (Also the same as frequency * severity) (Usually calculated using reported or ultimate losses as well as earned exposures) |

What is Pure Ratio? AKA Burn Ratio | Measures how much it costs to just pay claims. (Done using GPR or GIP) Take 100% and minus all fees and expenses. Ex: TPA, Broker, Meridian, Assistance, Carrier, Prem Admin, Claim Admin |

What are Ultimate Claims? What is the formula in excel? | Total Reported Claims that include IBNR Total Reported Claims / Percent Complete |

What is Target Loss Ratio? What is the formula in excel? | Percentage of gross claims that if claims exceed this %, the account will lose a % of profit. Once the percentage of gross claims exceeds the profit %, than the account will lose money. Total Ultimate Losses + Adjusted Claims for Inflation / Total Premium |

What is Average Rate Per Day? What is the formula in excel? | Average premium rate charged to the participant per day. Sum of Total Premium / Sum of Estimated # of days |

What is Variance? What is the formula in excel? | The difference between two numbers. Ex: Actual L/R - Target L/R |

What is Pure Rate Per Day? What is the formula in excel? | How much it costs per day to pay claims. (This is built into the rate that we charge) Ultimate Claims / Sum of estimated # of days |

What is the Projected Loss Ratio? What is the formula in excel? | Loss Ratio that we are projecting to be at based off of ultimate claims and total premium. Ultimate claims / Sum of Total premium |

What is projected profit? What is the formula in excel? | The difference between our breakeven loss ratio and our projected loss ratio. Tells us if we are making money. Breakeven Loss Ratio - Projected Loss Ratio |

What is Breakeven Loss Ratio? What is the formula in excel? | The % of claims we can incur before we lose money. 100% - Fees (EX: Broker, TPA, Carrier) |

How do you adjust premium? | Take the rate for each corresponding year (or policy period) and multiply that number by the # of days. (Or months, or trip cost depending on how the rate is charged. Rate could be daily, monthly, semester, or per trip. |

How do you adjust claims? | Account for medical inflation. 5% or 7%. Multiply ultimate claims by 5%/7% than add that number to the original ultimate claims to get the Adj. Claim Amount. For future years, repeat steps but use the Adj. Claim Amount instead of original ultimate claims |