Understand, interpret, and apply techniques for estimating outstanding claims, using Expected Loss Ratio, Chain-Ladder, Bornhuetter-Ferguson, Bayesian, and Frequency and Severity methods.
Free SOA Exam ASTAM (Advanced Short-Term Actuarial Mathematics) lesson in Reserving and Pricing for Short-Term Insurance Coverages. 32 min read, ~4,786 words.
Expected Loss Ratio (ELR): Ultimate = ELR × Earned Premium. Ignores actual emergence, so it is best only for green, immature accident years and breaks down as data matures. Chain-Ladder: Ultimate = latest cumulative × product of future age-to-age factors. Trusts the data and ignores priors, so a noisy latest...
Read the full lesson, free →
Worked examples and practice. Free with a free account, no card.
What this lesson covers
- Content
- Example 1
- Example 2
- Example 3
- Example 4
- Common Mistakes
- Check Your Understanding
- Exam Shortcuts
Learning objectives
- 6a
Browse all free Exam ASTAM lessons or jump into free Exam ASTAM practice questions.