In section 1.2 of this chapter, it talks about incremental claims so I wanna know What does incremental claim mean? And how is it different from actual claim amount?
So, say you work for a general insurer which logs its claim amounts semi annually, once in June and then at the year end. You have insured out lets say Videocon. There is a fire at the Videocon factory in May and their earliest estimate of the liability is 10million. Then at December End, once you have had the time to estimate the final liability, you discover that that the claim amount has gone up by 5m. In this case, 10m and 5m are incremental claims and 15m is the actual claim amount.
Thank You. And also in section 0.3 of the same chapter it says that entries in the table can also be ultimate cost. can you tell me what is ultimate cost?
