Excel Demo F-07 (030): Development Method - Paid & Reported Development

Comments

• Graham

  January 2021

  I just a took a look and I think it's ok, but I admit it's a little confusing because there are 2 estimates of ultimate given in the table.

  • column (3) is an estimate of ultimate based on the paid method
  • column (4) is an estimate of ultimate based on the reported method

  It's easy to get the actual paid & reported losses mixed up with the estimates of ultimate based on the paid & reported methods.

  For example, the calculation in column (6) is the IBNR based on the paid method in column (3):

  • column (6)
  • = column (3) - column (2)
  • = (estimate of ultimate using the paid method) - (latest reported diagonal)
  • = ultimate - reported
  • = IBNR

  You can do a similar calculation for the IBNR based on the estimate of ultimate given by the reported method, which would be column (4) - column (2). The same line of reasoning holds for the calculation of total unpaid. It's the same except you subtract column (1) instead of column (2) from the estimates of ultimate.

  Does that address your question? If not, please let me know.
• jj96gotthis

  January 2021 edited January 2021

  Sorry I wasn't clear enough...

  The IBNR based on paid should be paid ult - rpdt and the IBNR based on reported should be rptd ult - rptd right?

  Same for the Total Unpaid.

  

  Thank you!
• Graham

  January 2021

  Ok, gotcha! I uploaded a corrected version. Thx!