Claims closed without payment

On a Friday evening, a claims-made cyber insured gets an alert from its security provider and notifies the insurer, because the policy requires it and a late notice of circumstances can cost it the cover. By Monday the analysis finds a blocked attempt; the file, opened, coded, sometimes given a flat reserve, is closed without a cent paid. That is a claim closed without payment, CWP to actuaries: a claim reported and opened, then closed with no payment at all. The share of such files by age is information in its own right. It is tracked in counts, in a triangle, next to claims closed with payment, because an average cost computed over all closed claims blends two populations. When the share closed without payment rises, the average cost falls with no change in the severity of the paid claims, and a frequency times average cost method then projects too low an ultimate. The reverse happens when underwriting practice discourages precautionary notices. Cyber takes the effect further than most lines, with broad notification clauses and insureds that GDPR obligations make cautious. Motor and general liability have their nil claims too, often closed late. And a claim closed without payment is not always final: a third-party demand can reopen the file two years later. Reserving accounts for it through a reopening rate, or through IBNER on recently closed files. Not to be confused with the closure rate, which counts all closed claims, or with claim reopening, which is its possible sequel.