The Stanard-Bühlmann Reserving Procedure: A Practitioner's Guide

The Stanard-Bühlmann reserving method, commonly used by reinsurance actuaries, combines the stability of expected loss methods with the adherence to empirical data that is characteristic of the chain ladder method. This paper is a teaching guide for the reserving actuary: it explains the intuition for the Stanard-Büuhlmann reserving method, shows an algebraic derivation from the Bornhuetter-Ferguson reserving method, uses a series of illustrations to explain the needed premium adjustments, and compares the Stanard-Bühlmann reserving method with the Bornhuetter-Ferguson and chain ladder methods.