Actuary how-to
How to Estimate Claims Not Yet Reported
IBNR reserves cover future surprises.
Quick answer
IBNR reserves cover future surprises. In short: gather; calculate; select, then complete the remaining steps below.
Step by step
Gather loss triangles.
Calculate development factors.
Select factors.
Project ultimate losses.
Subtract reported.
Review reasonableness.
Safety reminders for actuaries
- Follow actuarial standards of practice
- Protect confidential data
- Document assumptions
- Disclose limitations
Key terms
Mortality table · Reserve · Premium · Loss ratio · Credibility · Present value: see the full actuary glossary.