4 Approaches To Estimate ULAE Reserve For A Group of Accident Years
- 1. Approach similar to Expected Loss Ratio: Unpaid ULAE =(W* x L) - M
- 2. Approach similar to B-F Method: Unpaid ULAE =
- a. W* x (L - B) =
- b. W* x U_{1} x [L - R(t)] + U_{2} x [L - P(t)] + U_{3} x [L - C(t)]
- 3. Approach similar to LDF method: Unpaid ULAE = M x (L/B - 1)
- 4. Approach using claim counts or transactions counts: Unpaid ULAE = Sum(W_{i}) x [(v_{1} x r_{i}) + (v_{2} x o_{i}) + (v_{3} x c_{i})]