ACTUARIAL RESERVING · T462 cat-30

Claims Reserve Adequacy Checker

Run the two universal actuarial reserving methods: the Development (Chain Ladder) method and the Bornhuetter-Ferguson method: on a loss development triangle. Outputs loss development factors, ultimate loss estimates, IBNR, and a reserve adequacy signal versus a booked reserve.

🔒Zero PII
📡No server calls
💻Client-side
📋CAS Reserving Standards
Chain Ladder Bornhuetter-Ferguson Loss Triangle IBNR LDF Reserve Adequacy CAS / Friedland 2010
🔒 All inputs are processed locally in your browser. No data is transmitted. Do not enter real personal data — use synthetic or anonymised inputs only.
A: Loss Development Triangle (Cumulative)
Cumulative incurred losses: rows = accident years · columns = development age (months)
Rows (max 10)
Columns (12, 24, 36 … months)
For row labels only

Enter cumulative values along each row's available diagonal. Leave the lower-right corner blank: those cells are projected. Blank, ragged, and non-numeric cells are handled automatically.

Bulk paste (optional)
B: LDF Selection Controls
Method for selecting age-to-age factors
Default 1.000: short-tailed lines only
Removes the newest, least-mature link ratios: useful when the latest diagonal is a known outlier.
C: Bornhuetter-Ferguson Inputs
Expected loss ratio before experience (ELR)
50 = simple average of CL & BF (default)
Earned premium by accident year ($)
D: Reserve Adequacy
Reserve currently on the balance sheet (total across years)
Leave 0 to skip year-over-year comparison
E: Key Reserving Metrics
F: Age-to-Age Factors & LDFs to Ultimate
G: Completed Development Triangle
Actual (reported) Projected (Chain Ladder)
H: Ultimate & IBNR by Accident Year
I: Method Comparison · Chain Ladder vs. Bornhuetter-Ferguson
J: Credibility Advisory & Caveats
About This Tool
Disclaimer Deterministic chain ladder and Bornhuetter-Ferguson calculation only. No confidence intervals or percentile estimates: stochastic reserving (Mack, bootstrap) requires additional modelling. The reserve adequacy conclusion is a mathematical comparison and does not constitute an actuarial opinion or satisfy appointed-actuary requirements under NAIC model law.
Development (Chain Ladder) MethodProjects ultimate losses by applying selected age-to-age factors to the latest diagonal. The dominant deterministic reserving technique for mature, stable lines.CAS · Friedland (2010)
Bornhuetter-Ferguson MethodCredibility-weights reported losses against an a priori expected-loss estimate (earned premium × ELR), stabilising immature accident years.Bornhuetter & Ferguson (1972), PCAS LIX
Loss Development Factors (LDFs)Cumulative product of selected age-to-age factors plus a tail factor: converts the latest diagonal to ultimate.CAS Exam 7 syllabus
IBNR & Reserve AdequacyIBNR = ultimate − reported. Redundancy / deficiency = booked reserve − selected IBNR.Friedland (2010), ch. 7–8
Tail FactorDevelopment beyond the last observed diagonal. Critical for long-tailed lines (workers' comp, medical malpractice); default 1.000 suits short-tailed lines only.CAS reserving practice
Method Cheat-Sheet
AGE-TO-AGE FACTOR (VW)
ATAF(j to j+1) = sum C(i,j+1) / sum C(i,j)
over rows with data in both cols
CHAIN LADDER
Ult = Latest * LDF(age to ult)
IBNR = Ult - Latest
% UNREPORTED
%Unrep(a) = 1 - 1/LDF(a to ult)
BORNHUETTER-FERGUSON
Exp = EP * ELR
BF Ult = Latest + %Unrep * Exp
IBNR = %Unrep * Exp