Mack's Formula for Reserve Estimate Using Gunnar Benktander Method (RGB)
- RGB = q_{k}U_{BF} or p_{k}R_{CL} + (1 - p_{k})R_{BF} where
- 1. U_{BF} = Estimate of ultimate losses using B-F method
- 2. RCL = Reserve estimate using Chain Ladder method
- 3. R_{BF} = Reserve estimate using B-F method
- 4. p_{k} = proportion of ultimate claims amount paid at time k = 1=ULD_{k}
- 5. q_{k} = proportion of ultimate claims amount unpaid at timek = 1 - p_{k}