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Loss development factor
Project ultimate claims for an accident year from its development pattern (chain ladder, one step).
Finance & unit economicsInsurance
How it's worked out
- Ultimate = cumulative to date × age-to-ultimate factor. IBNR = ultimate − incurred to date
- Past development pattern repeats
NoteThe factor comes from your own claims triangle; use the product of age-to-age factors. Actuarial sign-off is still needed.
Source: Chain-ladder method (CAS reserving texts; Friedland, Estimating Unpaid Claims)
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