Hi, I was looking at the first part of the questions and would please like to obtain further elaboration on the 2 statements below as I cannot seem to grasp: Incurred projections are useful as paid claims development will be less mature than incurred claims. Paid projections, however, can help identify changes or inconsistencies in the strength of case reserves or possible redundancies. Especially, for this one, how will we be seeing that in practice if we have 2 triangles - both paid and incurred. Many thanks.
Incurred claim triangles, include not only the paid claims, but also the estimated outstanding claims. Consequently, they should be closer to the amount that will ultimately be paid out. This is what we mean by the incurred claims being more mature (ie they are a greater percentage of the ultimate) and consequently by the paid claims being less mature. If we look at the ratio of the cumulative paid claims to cumulative incurred claims (ie divide the two triangles) this can help us to spot changes in the case reserving strength for example. This is discussed in Section 2.4 of Chapter 17.
