A Survey of Methods Used to Reflect Development in Excess Ratemaking

This paper discusses the strengths, weaknesses, and application of several months used to obtain in estimated ultimate loss distribution from data whose valuation is less than final. The central issues are introduced by examining several basic methods via a simple example. This foundation is followed by a description of three additional methods which rely on industry loss distributions as a basis for obtaining the ultimate loss distribution using limited data. Finally, a more robust method is introduced which accommodates slightly more refined, but not typical, data.

Reinsurance Research - Development