Clarification on Changing AY LR

jj96gotthisjj96gotthis
in F-15-Evaluation

Hi,

The Battlewiki states that one of the potential explanations for a rise in the estimate for reported development is the change in loss ratio. However, in chapter 7, the Battlewiki states that change in AY LR has no effect on the accuracy of the development method.

May I know whether change in AY LR affects the development method?

Thank you!

Comments

  • GrahamGraham

    A rise in an estimate of ultimate losses and the accuracy of the estimate are different things:

    • If the underlying loss ratio changes, then then estimate of ultimate losses should generally change appropriately, provided the method is responsive to such changes.
    • But the accuracy of the reported development isn't necessarily affected by a changing loss ratio, assuming nothing else changes. In particular, if the reported development pattern is stable and doesn't change, then reported development may produce different estimates but those estimates should be accurate.

    If this doesn't answer your question, please let me know where in the wiki you found these statements and/or any examples you're referring to. It might be easier then to address your question.

Sign In or Register to comment.