CHAIN-LADDER METHOD AND MIDYEAR LOSS RESERVING

What is it about?

Although, loss reserving has been deeply studied in the literature there are still practical issues that have not been addressed a lot. One of them is the estimation of reserves during the year, which is necessary for forecasts or closings during the year. We will study the following question: What can be done for forecasts and closings during the year that goes along with the reserving at year end?

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Why is it important?

We will describe several methods that are used in practice. We will discuss advantages and disadvantages of these methods based on a simple deterministic example. Roughly spoken we will see that you may shift development or accident periods; or may split development periods, but should not split accident periods.