Using Life Expectancy to Inform the Estimate of Tail Factors for Workers Compensation Liabilities

Traditional accident year paid and/or reported loss development methods are often used to estimate liabilities for workers compensation claims by selecting age-to-age loss development factors which are then fitted to a curve.

This short paper shares a practical reserving technique that can inform traditional loss development methods to more accurately estimate the liabilities associated with a body of claims that has claimant mortality as the main driver of the length of the tail.

Keywords: Workers Compensation, Reserving, Reserving Methods