Chapter 18 - Run off Triangles Flashcards
1
Q
When applying the chain ladder method, do we use cumulative claims?
A
Yes
2
Q
When we calculate the error, do we use cumulative claims?
A
No, we use the increases each year and use
Error = actual - fitted
3
Q
What assumption does the chain ladder method have?
A
payments from each accident year will develop in the same way
It is assumed that weighted average past inflation will be repeated in the future
