Reserving Triangle

Together with Dr. Ulrich Mueller, we developed a realistic non-life insurance development triangles tool in the Systemorph Cloud platform. We use historical loss development patterns to derive future losses, applying the chain-ladder method. We apply this approach to three lines of business: property, motor, and liability/casualty, which are correspondingly short, mid, and long tail, that is, claim recognition and payment may extend over a long period. Each line of business is treated as one reserving cell, and several key indicators can be calculated and reported from the tool. First and foremost there are the ultimates and the projected values. Then, the claims incurred but not reported (IBNR) and the claims reported but not paid (RBNP). Finally, the sum of the last two yields the claims reserves.