# Conger & Nolibos

 Dollar-based vs Count-based ULAE methods Dollar-based assumes ULAE tracks w. loss dollarsCount-based assumes that same kind of transaction vost same amt of ULAEDivergent assumptions may not affect results severely (only need to be correct for the avg) Classical pd to pd ratio for ULAE Generally assumes that 50% of ULAE occurs when clm is rpt, and 50% when it's closed Kittel's refinement for ULAE Explicitely recognize the fact that ULAE is inc as clm as rpt, even when no loss pmt are madeUse ratio of pd ULAE to ½*(pd + inc) Generalized approach to est ULAE DefinitionsU1/2/3 = & of ult ULAE spent on opening/maintaining/closingR/C/P = ult cost for clms rpt, closed, pdW = ratio of ult ULAE to ult lossesM = total ULAE for periodB = loss basis for periodFormulasM = (R*U1*W) + (P*U2*W) + (C*U3*W)B = M / WFinal resultApproach similar to ELR: Unpd ULAE = (W** L) - MApproach similar to BF: Unpd ULAE = W* * (L - B)Approach similar to dvpmt: Unpd ULAE = M * (L / B - 1) Generalized approach to est ULAE Practical difficulties Inconsistencies in the reporting of clm adj expEstimation of R and C may not be trivialIgnores cost of reopening and reclosingLoss inflation can cause material distortions AuthorEsaie ID33888 Card SetConger & Nolibos DescriptionExam6 by Esaie Conger & Nolibos Updated2010-09-11T01:58:07Z Show Answers