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Calculate cumulative claim development factors; Project ultimate claims; Age-to-age factors, also called loss development factors (LDFs) or link ratios, represent the ratio of loss amounts from one valuation date to another, and they are intended to capture growth patterns of losses over time. These factors are used to project where the ...
Loss reserving is the calculation of the required reserves for a tranche of insurance business, [1] including outstanding claims reserves. Typically, the claims reserves represent the money which should be held by the insurer so as to be able to meet all future claims arising from policies currently in force and policies written in the past.
Sometimes the term case fatality ratio is used interchangeably with case fatality rate, but they are not the same. A case fatality ratio is a comparison between two different case fatality rates, expressed as a ratio. It is used to compare the severity of different diseases or to assess the impact of interventions. [6] Because the CFR is not an ...
Case mix index (CMI) within health care and medicine, is a relative value assigned to a diagnosis-related group of patients in a medical care environment. The CMI value is used in determining the allocation of resources to care for and/or treat the patients in the group.
Ultimate loss amounts are necessary for determining an insurance company's carried reserves. They are also useful for determining adequate insurance premiums, when loss experience is used as a rating factor [4] [5] [6] Loss development factors are used in all triangular methods of loss reserving, [7] such as the chain-ladder method.
In this formula, I = number of incident cases in the population, DW = disability weight of specific condition, and L = average duration of the case until remission or death (years). There is also a prevalence (as opposed to incidence) based calculation for YLD. Number of years lost due to premature death is calculated by YLL = N × L
For example, when a claim is first reported, a $100 payment might be made, and a $900 case reserve might be established, for a total initial reported amount of $1000. However, the claim may later settle for a larger amount, resulting in $2000 of payments from the insurer to the claimant before the claim is closed.
In insurance, an actuarial reserve is a reserve set aside for future insurance liabilities. It is generally equal to the actuarial present value of the future cash flows of a contingent event. In the insurance context an actuarial reserve is the present value of the future cash flows of an insurance policy and the total liability of the insurer ...