Select and apply a tail factor to carry development beyond the edge of the observed triangle.
Free CAS Exam 5 (Basic Ratemaking and Reserving) lesson in Estimating Claim Liabilities. 12 min read, ~1,804 words.
A tail factor extends development beyond the oldest observed age to ultimate, capturing payments or emergence the triangle cannot show. The tail is a cumulative development factor from the last observed age to ultimate; it multiplies onto the age-to-age product, never replaces it. Long-tail lines (WC, general liability, med mal)...
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What this lesson covers
- Content
- Example 1
- Example 2
- Common Mistakes
- Check Your Understanding
- Exam Shortcuts
Learning objectives
- B7
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