Aggregate Loss Reserve Analysis by Accounting Date

This paper introduces new systematic procedures to estimate aggregate unpaid claims as of the current accounting date. Through the use of examples that introduce concepts in a natural progression, emphasis is placed on the reasonability and practicality of an accounting date reserving framework and its appeal to loss reserving practitioners. The accounting date framework provides a fresh perspective which differs from traditional actuarial reserving methods that typically derive unpaid claim estimates using individual accident year experience. Current accounting date aggregate unpaid claims are directly estimated from the emergence of aggregate claim experience which had been unpaid as of prior accounting dates. Exploration of this accounting date framework leads to techniques that may be understood as accounting date analogues of commonly used accident year reserving methods including the incurred development and Bornhuetter-Ferguson methods.

In addition to revealing visibly apparent aggregate unpaid claim estimates, the structure of appropriate accounting date reserving applications suggests improved accuracy over corresponding accident year development methods.

Keywords: loss reserve; reserving; unpaid claim estimate; IBNR; Bornhuetter-Ferguson; accounting date