Say you have a D&O claims-made policy covering claims reported in 2019. Subsequently, a claim is made for a loss that occurred in 2014. Assume you are an actuary of a company that projects its reserves on an earned basis. Based on the information above, the loss should appear in the AY 2014 row in your claims run-off triangle. However, this would be inconsistent with the earned premium which would fall in AY 2019, so you could be over-estimating accident year loss ratios on the back years. Can I please ask if I am misunderstanding something here as the above doesn't make complete sense to me? Thank you in advance!
You would normally use reporting year triangles to reserve for business that is written on a claims made basis.
