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| − | The row labels are '''Accident Years'''. | + | * The row labels are '''Accident Years''' and we'll often use the abbreviation '''AY'''. |
| + | * The column labels are '''Development Periods'''. In this triangle the periods are <u>months</u> and that's quote common. | ||
Look at the first row: | Look at the first row: | ||
Revision as of 14:17, 5 May 2020
Reading: Friedland, J.F., Estimating Unpaid Claims Using Basic Techniques, Casualty Actuarial Society, Third Version, July 2010. The Appendices are excluded.
Chapter 5: The Development Triangle
Pop Quiz
Study Tips
A loss development triangle, or just triangle for short, is a fundamental concept in both pricing and reserving. Here are 4 things you must know:
- what does a loss development triangle look like
- what information does it give you
- how do you construct a triangle from raw claims data
- how do you use a triangle to estimate ultimate losses
We cover #1,2,3 in this chapter. Point #4 is what most of the rest of the Friedland text is about. There are many methods for estimating ultimate losses (or claims) starting with development triangles. Certain methods work better than others in different situations.
We're going to plow through this chapter at high speed. You'll get lots of practice working with triangles in all of the remaining chapters.
Estimated study time: 1 day
BattleTable
Based on past exams, the main things you need to know (in rough order of importance) are:
- fact A...
- fact B...
reference part (a) part (b) part (c) part (d) E (2016.Fall #16) E (2015.Fall #16) E (2015.Spring #15) E (2014.Fall #14) E (2013.Fall #14)
In Plain English!
| What does a development triangle look like? |
Development Periods AY 12 24 36 48 2020 2021 2022 2023
- The row labels are Accident Years and we'll often use the abbreviation AY.
- The column labels are Development Periods. In this triangle the periods are months and that's quote common.
Look at the first row:
