Extrapolating, Smoothing and Interpolating Development Factors

The purpose of this paper is to provide a practical handbook describing simple yet accurate methods of extrapolating. smoothing, and interpolating development factors. It will focus on the inverse power curve, its properties, and examples of fits obtained to various types of loss experience. It will also illustrate usage of the inverse power curve in addressing a variety of actuarial problems. including the following: A lack of mature development experience, a lack of credible loss development data, loss data at interim evaluation dates, loss experience at odd. inconsistent evaluation dates, and a need to break down annual development into quarterly or monthly segments. The objective of this paper is to enhance the reader's capability in analyzing loss development.