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  #801  
Old 02-11-2019, 08:04 PM
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ASM does not have a discussion of stimulation, but considering how boring the manual is, maybe it would be a good idea.
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Old 02-11-2019, 08:28 PM
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that's like saying all of predictive modeling is arbitrary. any of these models could be useful in the right context, or combined with each other to be useful given that certain assumptions are met.
Sorry I didn't mean the methods themselves were arbitrary just some of the assumptions in them. Like for Clark truncation point or Robin why does one method have to use risk free rate but another has the option of using three types of rates.
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Old 02-11-2019, 09:53 PM
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In Patrik pg. 442, he introduces the four steps involved in reinsurance loss reserving methodology. Can anyone tell me where he states what step 4 is? Last one I see is Step 3 on pg. 445.
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Old 02-11-2019, 10:06 PM
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Are we sure there’s 4 and it’s not a typo or carryover from an old edition?
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ASM does not have a discussion of stimulation, but considering how boring the manual is, maybe it would be a good idea.
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Old 02-11-2019, 10:08 PM
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Are we sure thereís 4 and itís not a typo or carryover from an old edition?
No we are not sure. Bayesian estimate for # of steps is 3.2.
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Old 02-11-2019, 11:20 PM
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Is step 4 profit?
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  #807  
Old 02-11-2019, 11:37 PM
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Stp 4 is ??? And the secret step 5 is profit
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  #808  
Old 02-12-2019, 01:52 AM
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Sorry I didn't mean the methods themselves were arbitrary just some of the assumptions in them. Like for Clark truncation point or Robin why does one method have to use risk free rate but another has the option of using three types of rates.
I personally find Shapland's solution to the negative value problem very hand wavey when he just takes the absolute value of the negative. Like, that wasn't the value? You can't just change the data? lol
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Old 02-12-2019, 02:28 AM
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Thanks, not a bad way to keep in straight in my head, but it still seems fairly arbitrary to me. Choosing an ultimate and choosing a reserve amounts to the same thing really.
Yeah honestly I feel the same way. Like some poster said it's not really arbitrary though because it's two completely different ideas. What helped me is thinking of it more like an ELR implies a certain Ultimate X, you are applying a % unreported to get a reserve from that ultimate X (you have no idea what the reported loss today would be of that ultimate X, you can only estimate it) and then you add your actual reported losses to date which results in a new Ultimate Y. For CL, there's no prior estimate of ultimates for you to go off of so you create an ultimate which you can then feed into the process above, creating some type of BF method.


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Originally Posted by LifeIsAPoissonProcess View Post
In Patrik pg. 442, he introduces the four steps involved in reinsurance loss reserving methodology. Can anyone tell me where he states what step 4 is? Last one I see is Step 3 on pg. 445.
I'm pretty sure it's supposed to be Monitoring. I actually posted the same thing before and monitoring kinda made sense as the last one so I'm going with that.

Last edited by DamSon; 02-12-2019 at 02:43 AM..
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  #810  
Old 02-12-2019, 06:35 AM
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I personally find Shapland's solution to the negative value problem very hand wavey when he just takes the absolute value of the negative. Like, that wasn't the value? You can't just change the data? lol
Yes I think that was handy. I like how he changes the whole triangle to by adding the negative of the negative value and then flips the triangle back.
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