# Mack

 The flashcards below were created by user Esaie on FreezingBlue Flashcards. Mack's Formula for Ultimate Losses U = Ck + R, where1. U = Ultimate Claims2. Ck = Claims amount paid up to time k3. R = Reserve Estimate Advantages of Benktander Method over B-F and C-L Methods 1. Generally has a lower mean squared error2. Found to be almost as precise as an exact Bayesian procedure3. Outperforms the B-F and C-L methods in many situations Mack's Formula for Reserve Estimate Using Gunnar Benktander Method (RGB) RGB = qkUBF or pkRCL + (1 - pk)RBF where1. UBF = Estimate of ultimate losses using B-F method2. RCL = Reserve estimate using Chain Ladder method3. RBF = Reserve estimate using B-F method4. pk = proportion of ultimate claims amount paid at time k = 1=ULDk5. qk = proportion of ultimate claims amount unpaid at timek = 1 - pk Mack's Formula for Ultimate Losses Using Gunnar Benktander Method (UGB) UGB = Ck + RGB = (1 - qk2)UCL + qk2U0 where1. UCL = Estimate of ultimate losses using LDF method2. U0 = Estimate of ultimate losses prior to taking claims experience into account3. RGB = Reserve estimate using Gunnar Benktander method4. Ck = Claims paid to date at period k5. qk = proportion of ultimate claims amount unpaid at timek = 1 - pk AuthorEsaie ID26176 Card SetMack Description Updated2010-07-09T20:13:27Z Show Answers