When working through the question I noted that the development factors for period 1-2 were increasing. In the solution it says that as the development factors are increasing it looks like claims development has been slowing down at this stage. Could you explain the reasoning behind the slowdown comment?
Perhaps the easiest way to see this is to assume from period 2 onwards, all other factors being equal, every cohort develops in the same way so that the subsequent development factors are the same. Hence the most recent year will have the greatest cumulative development factor to ultimate (the product of the incremental ones) and will therefore be the least developed (as the development percentage is the reciprocal of the cumulative development factor to ultimate) at period 1. Hence all other factors being equal, increasing incremental development factors as you go down a column means that the development is slowing down. In reality of course it is very unlikely that each year will develop precisely the same from period 2 onwards.
