T
the_mighty_onion
Member
A question on the BF method:
On page 27 of the ASET, we have:
"With £20.1m of premium, the increase in reserves will therefore be:
20.1m*(114.64% - 93.7%) = 4.20m"
Now, doesn't this actually correspond to the increase in the ultimate claims amount, rather than the increase in reserves? Don't we need to make use of the mean term of the paid claims here in order to arrive at the increase in reserves, by effectively making a subtraction for claims paid so far?
On page 27 of the ASET, we have:
"With £20.1m of premium, the increase in reserves will therefore be:
20.1m*(114.64% - 93.7%) = 4.20m"
Now, doesn't this actually correspond to the increase in the ultimate claims amount, rather than the increase in reserves? Don't we need to make use of the mean term of the paid claims here in order to arrive at the increase in reserves, by effectively making a subtraction for claims paid so far?