Skip to content

Hursh Gupta

Expected Claims

Stochastic Reserving Framework

Expected Claims¶

Use historical data to calculate loss ratios. Don't use the experience period for which the calculation has to be done.

Misc.¶

Negative IBNR may be due to
- reserves being set too high.
- recoveries such as salvage or subrogation are anticipated
Remember that case reserves are set by Claim-Adjusters (Think of them as a character in the story)

Mistakes¶

2009 Exam 6 - Q9: Used paid losses to calculate IBNR. When that should be used to calculate the unpaid claims! So, we should have just used the latest claim to date, in the incurred triangle.