Revision as of 21:00, 14 May 2023 by Admin (Created page with "'''Key: E''' First, use the Borhuetter-Ferguson method to calculate the estimated ultimate loss as 47,387/(1-1/1.08) = 639, 724.5. Next, calculate IBNR under the expected los...")
Exercise
ABy Admin
May 14'23
Answer
Key: E
First, use the Borhuetter-Ferguson method to calculate the estimated ultimate loss as 47,387/(1-1/1.08) = 639, 724.5. Next, calculate IBNR under the expected loss ratio method as 639,724.5 − (187,047 + 243,005) = 209,672.5. Then, IBNR under the chain-ladder method is (187,047 + 243,005)*0.08 = 34,404.16 . The absolute difference is 209,672.5 − 34, 404.16 = 175, 268.34.
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