Actuarial Outpost
 
Go Back   Actuarial Outpost > Actuarial Discussion Forum > General Actuarial
FlashChat Actuarial Discussion Preliminary Exams CAS/SOA Exams Cyberchat Around the World Suggestions



General Actuarial Non-Specific Actuarial Topics - Before posting a thread, please browse over our other sections to see if there is a better fit, such as Careers - Employment, Actuarial Science Universities Forum or any of our other 100+ forums.

Reply
 
Thread Tools Search this Thread Display Modes
  #21  
Old 03-16-2018, 11:19 AM
PeppermintPatty's Avatar
PeppermintPatty PeppermintPatty is offline
Member
CAS
 
Join Date: Sep 2001
Posts: 37,473
Default

Quote:
Originally Posted by yoyo View Post
this sounds like projecting loss ratios for budgeting purposes and 3-5 year forecasts
This.

I've never heard of someone trying to project IBNR in the future on business that hasn't been written. But it's not uncommon to try to project how much business will be written, and at what loss ratio. And I suppose you could then take your payment patterns and back into future IBNR, but why would you do that?

OP, I agree with JMO and Westley, you need to push back and figure out the purpose of this request, and what is actually useful information that might be realistically projected to answer THAT question.
Reply With Quote
  #22  
Old 03-16-2018, 05:05 PM
CuriousGeorge CuriousGeorge is offline
Member
CAS SOA
 
Join Date: Dec 2005
Posts: 1,180
Default

Quote:
Originally Posted by PeppermintPatty View Post
This.

I've never heard of someone trying to project IBNR in the future on business that hasn't been written. But it's not uncommon to try to project how much business will be written, and at what loss ratio. And I suppose you could then take your payment patterns and back into future IBNR, but why would you do that?
I've had to do that before. 5 year P&L, plus balance sheet. So I was forced to project UPR balances, case reserves, and IBNR.
Reply With Quote
  #23  
Old 03-16-2018, 11:23 PM
Maphisto's Sidekick's Avatar
Maphisto's Sidekick Maphisto's Sidekick is offline
Member
CAS
 
Join Date: Nov 2001
Location: South Park Genetics Lab
College: Ardnox
Favorite beer: The kind with alcohol
Posts: 2,382
Default

While this sounds like a finance cash flow or income statement projection project run amok, that sentiment comes from a US-based focus.

The very little bit I've seen of IFRS makes me wonder if the finance project would be less amok in markets operating under those accounting rules.
Reply With Quote
  #24  
Old 06-02-2018, 08:37 PM
Yamamay Yamamay is offline
Member
Non-Actuary
 
Join Date: Mar 2014
Posts: 428
Default

If your company uses some kind of embedded/economic value measure then the projections of your IBNR will impact the future capital costs of holding this IBNR. Those capital costs are then PVed, of course.
Reply With Quote
  #25  
Old 06-02-2018, 08:51 PM
DoctorNo's Avatar
DoctorNo DoctorNo is offline
Member
SOA AAA
 
Join Date: Dec 2004
Location: Denver, CO
College: Western Washington, Colorado-Boulder
Posts: 12,919
Default

Sure, okay.
__________________
The opinions of Doctor No do not necessarily represent the opinions of mathematicians or consulting actuaries. Facts cited by Doctor No are not necessarily facts. Find me on Twitter: @NorrisDoug. If you send me a LinkedIn invitation, please let me know who you are (unless it's obvious how I know you).
Reply With Quote
  #26  
Old 06-02-2018, 09:02 PM
Vorian Atreides's Avatar
Vorian Atreides Vorian Atreides is offline
Wiki/Note Contributor
CAS
 
Join Date: Apr 2005
Location: As far as 3 cups of sugar will take you
Studying for ACAS
College: Hard Knocks
Favorite beer: Most German dark lagers
Posts: 62,472
Default

I'm not sure what is gained by "projecting IBNR" separate from "projecting (total) ultimate losses" if the final answer is the bottom line g/l information.

Find a way to estimate that total ultimate losses, then use your software to back into "projected IBNR".

One estimate for that total ultimate losses is the LR assumption used in determining the premiums; but find ways to check the adequacy of that particular assumption. For example, if it turns up that recent rate changes have been "short changed" (e.g., the actuarial indicated rate change is +15%, but push back from U/W results in implementing a +10%, your premiums are short by ~4.5%), then you might want to build that in to your estimated ultimate losses.
__________________
I find your lack of faith disturbing

Why should I worry about dying? Itís not going to happen in my lifetime!


Freedom of speech is not a license to discourtesy

#BLACKMATTERLIVES
Reply With Quote
  #27  
Old 06-03-2018, 08:44 AM
PAC PAC is offline
Member
CAS AAA
 
Join Date: Jan 2003
Posts: 238
Default

Need to separate IBNR if projecting cash flows i.e, liquidity.

IIRC balance sheet management and capital stress testing required of US banking organizations require such including for insurance subs.
Reply With Quote
  #28  
Old 06-04-2018, 11:17 AM
AMedActuary AMedActuary is offline
Member
SOA
 
Join Date: May 2007
College: UCLA Alumni
Posts: 389
Default

Are you projecting any changes to the population? Sometimes I see this exercise when we know the population will grow/shrink substantially or claims cost will go up due to an expensive new benefit or something. If you're not projecting any significant change in population or claims, then I would just keep it the same as what it currently is now. Yes there is month to month variation but I don't think the size would affect your overall projection.
Reply With Quote
Reply

Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off


All times are GMT -4. The time now is 04:28 AM.


Powered by vBulletin®
Copyright ©2000 - 2018, Jelsoft Enterprises Ltd.
*PLEASE NOTE: Posts are not checked for accuracy, and do not
represent the views of the Actuarial Outpost or its sponsors.
Page generated in 0.20563 seconds with 9 queries