Loss Development

Loss development is the way reported claim amounts for an accident or underwriting period change over time as claims are paid, re-estimated and newly reported. Actuaries study historical development patterns, often summarised as development factors, to project reported losses to their ultimate settled value and set adequate reserves.

Related terms

• IBNR (Incurred But Not Reported)
• Chain Ladder Method
• Bornhuetter-Ferguson Method

See also

• Auditability in actuarial workflows