On the Statistical Estimation of Costs of Claims

For a number of reasons it is important /or an insurance company to estimate the claims costs of a year within the different branches of non-life insurance as soon as possible after tile end of the year. The claims cost of a year is hereby defined as the total cost, before taking reinsurance into account, of all claims generated by events that have occurred during the year. When the estimation has to be done, part of these claims will be reported and closed, others will be reported and stilt open, and the remaining ones will be incurred but not yet reported. Tile total cost of the claims is defined as the sum of all payments that have been made or will be made on account of the claims. Thus, in this definition no regard is paid to interest, i.e. no discount factors are applied to payments to be made in the future.