Separation of Claims Development Triangles into Basic Losses and Large Losses

In order to estimate the ultimate loss in long tail business, there is an increasing trend to separate the claims development triangles into individual triangles for basic and large losses and evaluate each of the chain-ladder-projections separately. This essay describes a theoretical foundation of this approach: In case of superimposed inflation affecting large claims, it is proved that the separated approach systematically yields a larger estimate for the ultimate loss than the traditional, combined chain-ladder-projection. The existence of a superimposed inflation for large claims is analysed for a motor third part portfolio in Germany. Article is written in German.