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The chain-ladder or development [1] method is a prominent [2] [3] actuarial loss reserving technique. The chain-ladder method is used in both the property and casualty [1] [4] and health insurance [5] fields. Its intent is to estimate incurred but not reported claims and project ultimate loss amounts. [5]
In insurance, an actuarial reserve is a reserve set aside for future insurance liabilities. It is generally equal to the actuarial present value of the future cash flows of a contingent event. In the insurance context an actuarial reserve is the present value of the future cash flows of an insurance policy and the total liability of the insurer ...
Hattendorff's Theorem, attributed to K. Hattendorff (1868), is a theorem in actuarial science that describes the allocation of the variance or risk of the loss random variable over the lifetime of an actuarial reserve. In other words, Hattendorff's theorem demonstrates that the variation in the present value of the loss of an issued insurance ...
Loss reserving is the calculation of the required reserves for a tranche of insurance business, [1] including outstanding claims reserves.. Typically, the claims reserves represent the money which should be held by the insurer so as to be able to meet all future claims arising from policies currently in force and policies written in the past.
The size of a CRVM reserve, as with most life reserves, is affected by the age and sex of the insured person, how long the policy for which it is computed has been in force, the plan of insurance offered by the policy, the rate of interest used in the calculation, and the mortality table with which the actuarial present values are computed.
The actuarial present value (APV) is the expected value of the present value of a contingent cash flow stream (i.e. a series of payments which may or may not be made). Actuarial present values are typically calculated for the benefit-payment or series of payments associated with life insurance and life annuities .
Actuarial notation is a shorthand method to allow actuaries to record mathematical formulas that deal with interest rates and life tables. Traditional notation uses a halo system, where symbols are placed as superscript or subscript before or after the main letter. Example notation using the halo system can be seen below.
The actuarial control cycle is a specific business activity which involves the application of actuarial science to real world business problems. The actuarial control cycle requires a professional within that field (i.e., an actuary ) to specify a problem, develop a solution, monitor the consequences thereof, and repeat the process. [ 1 ]