Estimating Unpaid Claims

Across 17 chapters, every question reviewed and exam-aligned.

Tap a chapter to see what it covers.

1. 1Overview28 questions28▾

   Overview: what unpaid claims are, why estimating them matters for insurers, and the main users of the estimates.

2. 2The Claims Process28 questions28▾

   The claims process: from claim notification to settlement, case outstanding, reopened claims and the role of claims staff.

3. 3Understanding the Types of Data Used in the Estimation of Unpaid Claims28 questions28▾

   Data for estimating unpaid claims: grouping and subdividing data, claim counts, paid and reported claims, and premium and exposure.

4. 4Meeting with Management28 questions28▾

   Meeting with management: what to ask about operations, claims handling, underwriting and the external environment before projecting.

5. 5The Development Triangle28 questions28▾

   The development triangle: building claim triangles by accident year and age, age-to-age factors and averages.

6. 6The Development Triangle as a Diagnostic Tool28 questions28▾

   The triangle as a diagnostic tool: claim ratios, average values, closure rates and paid-to-reported ratios that reveal changes.

7. 7Development Technique28 questions28▾

   Development (chain ladder) technique: selecting age-to-age and tail factors, projecting ultimate claims and its key assumptions.

8. 8Expected Claims Technique28 questions28▾

   Expected claims technique: ultimate claims from an expected claim ratio, when it is useful and its weaknesses.

9. 9Bornhuetter-Ferguson Technique28 questions28▾

   Bornhuetter-Ferguson technique: actual reported claims plus expected unreported claims, credibility view and the Benktander method.

10. 10Cape Cod Technique28 questions28▾

    Cape Cod technique: expected claim ratio derived from reported claims and used-up premium, and how it differs from BF.

11. 11Frequency-Severity Techniques28 questions28▾

    Frequency-severity techniques: projecting claim counts and average values, trending, disposal rates and exposure-based approaches.

12. 12Case Outstanding Development Technique28 questions28▾

    Case outstanding development technique: projecting from case outstanding, and the approach for self-insurers using benchmark factors.

13. 13Berquist-Sherman Techniques28 questions28▾

    Berquist-Sherman techniques: adjusting triangles for changes in case outstanding adequacy and in claim settlement rates.

14. 14Recoveries: Salvage and Subrogation and Reinsurance28 questions28▾

    Recoveries: estimating salvage and subrogation, and working with gross, ceded and net of reinsurance data.

15. 15Evaluation of Techniques28 questions28▾

    Evaluating techniques: comparing results, selecting ultimate claims, and monitoring actual against expected development.

16. 16Estimating Unpaid Allocated Claim Adjustment Expenses28 questions28▾

    Allocated claim adjustment expenses: development of ALAE and of the ratio of paid ALAE to paid claims.

17. 17Estimating Unpaid Unallocated Claim Adjustment Expenses28 questions28▾

    Unallocated claim adjustment expenses: the classical technique, Kittel and Conger-Nolibos refinements, and count-based methods.