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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.
The chain-ladder or development [1] method is a prominent [2] [3] actuarial loss reserving technique. The chain-ladder method is used in both the property and casualty [ 1 ] [ 4 ] and health insurance [ 5 ] fields.
In the second approach, reported (or paid) losses are first developed to ultimate using a chain-ladder approach and applying a loss development factor (LDF). Next, the chain-ladder ultimate is multiplied by an estimated percent reported. Finally, expected losses multiplied by an estimated percent unreported are added (as in the first approach).
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.
Loss given default or LGD is the share of an asset that is lost if a borrower defaults. It is a common parameter in risk models and also a parameter used in the calculation of economic capital , expected loss or regulatory capital under Basel II for a banking institution .
U.S. health officials warned parents to avoid powdered infant formula sold by a Texas dairy producer, because a dangerous bacteria was found in one of the company's products. The Food and Drug ...
Loss of load in an electrical grid is a term used to describe the situation when the available generation capacity is less than the system load. [1] Multiple probabilistic reliability indices for the generation systems are using loss of load in their definitions, with the more popular [2] being Loss of Load Probability (LOLP) that characterizes a probability of a loss of load occurring within ...
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