You are given the following cumulative incurred losses by development year: Accident Year   DY0   DY1   DY2   DY3 3   2,100   2,520   3,780   4,347 4   2,700   3,240   4,860   5,589 5   3,300   3,960   5,940   6   3,700   4,440       7   4,000           Using the loss development technique and all-year arithmetic average incurred loss development factors, the estimated ultimate losses for Accident Years 3 and 4 are 4,673 and 6,008, respectively. Estimate the ultimate loss for Accident Year 6 as of December 31, Year 7.

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Contingent Liabilities and Provisions

A contingent liability can be defined as a liability the occurrence of which is dependent upon the happening of an uncertain future event. It is generally recorded in the books only when the amount of liability can be reasonably estimated and the contingency is likely to occur shortly.