In most situations, all claims are not closed until many years after a period ends. At that point, it is unlikely another claim will be reported. However, a program with a small volume of loss may show all claims as closed soon after the period ends. When this happens, Loss Forecaster will show a factor of 1.000 even though there is some potential another claim will be reported. Loss Forecaster does allow the user to override the development factors. If you feel there will be additional development for a recent period, then you can use a factor greater than 1.000 to capture that potential.
Articles in this section
- Are there industry specific LDF’s?
- I have a problem with how the LDFs are generated when all the losses are paid. In these situations, the incurred LDF is 1.00 - shouldn't there still be an IBNR element to the LDFs?
- What is the source of the LDFs (loss development factors) and other trending data in Loss Forecaster? Are they specific to the selected industry?
- The inflation rate implied by the inflation trend factors varies by line of coverage. Why is the inflation rate not constant?