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What are the benefits of using Basic Chain Ladder on incremental claims instead of cumulative claims

N

Nadeem Naidoo

Member
Cumulative claims seem to have more stable development, and don't result in large late development factors in long tailed tailed business (or even division by zero issues). Why would BCL ever be applied on incremental claims instead of cumulative claims?
 
Incremental is just used as an interim step to adjust for inflation. It should then be cumulated again before projection
 
What a pathetic method. Why do I have to go through this again? I passed CT6 already and now the IFoA think I’m going to do the same exam again. I will not be studying the same rubbish all over again. If there are any other students who passed CT6 but not CT4, please contact me as I’m taking legal action for the lies that have been fed to us. In South Africa you can still take CT4 and CT6 separately... if you’re South African...
 
Infinity said:
What a pathetic method. Why do I have to go through this again? I passed CT6 already and now the IFoA think I’m going to do the same exam again. I will not be studying the same rubbish all over again. If there are any other students who passed CT6 but not CT4, please contact me as I’m taking legal action for the lies that have been fed to us. In South Africa you can still take CT4 and CT6 separately... if you’re South African...
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Hi Infinity. I do not think the statement you have said is quite true. The Actuarial Society of South Africa (ASSA) has separated CM1 and kept it as CT1 and CT5. The CS2 exam has not been split. An ASSA student who is does not have both CT4 and CT6 will unfortunately have to do the CS2 exam and is equally affected by the change. Furthermore, ASSA exams are not for South Africans alone, they are open to anyone who is a member of ASSA irrespective of their country of origin.
 
Infinity said:
What a pathetic method. Why do I have to go through this again? I passed CT6 already and now the IFoA think I’m going to do the same exam again. I will not be studying the same rubbish all over again. If there are any other students who passed CT6 but not CT4, please contact me as I’m taking legal action for the lies that have been fed to us. In South Africa you can still take CT4 and CT6 separately... if you’re South African...
Click to expand...

If you mean Run-off triangles from CT6, that one is actually in CM2 along with Ruin Theory. (Which unfortunately, in your case, still doesn't make a difference in that you have to do them again.)

What I find more interesting is that only about half of CT6 (in terms of course content) actually translates over towards CS2, which also includes Extreme Value Theory, Copulas, Machine Learning, pretty much all of CT4 and of course the use of R.
 
Bidza said:
Hi Infinity. I do not think the statement you have said is quite true. The Actuarial Society of South Africa (ASSA) has separated CM1 and kept it as CT1 and CT5. The CS2 exam has not been split. An ASSA student who is does not have both CT4 and CT6 will unfortunately have to do the CS2 exam and is equally affected by the change. Furthermore, ASSA exams are not for South Africans alone, they are open to anyone who is a member of ASSA irrespective of their country of origin.
Click to expand...

Sorry well in that case i meant CT1 and CT5 then. I have CT1 but not CT5. Also CT8 doubles. This is how I end up with 6 exams instead of 3. Can you confirm if you can take IFoA exams in South Africa?
 
To answer Nadeem's original question, you wouldn't ever use the basic chain ladder on incremental claims, for the reasons you highlight yourself.

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