27.7 A Model for Reserving Workers Compensation High Deductibles - J. Siewert

6 methods and their pros and cons:

  1. Loss Ratio Method

  2. Implied Development

  3. Direct Development

    • See the 2 methods, (7.3) and (7.4), for calculating the \(^{XS}LDF^L_t\)

    • (7.4) is basically from method 5 proposition 7.3

  4. Credibility Weight Method

    • Formula (7.5) weighting 1 and 3

  5. Development Method

    • \(\star \star\) Relativities 7.1, severity LDF formulas, know them well to manipulate and know what formula requires what

      • Proposition 7.1 and 7.2 are simlar one for limited one for XS

        • Might need to break out the \(LDF_t\) into it’s components
      • Proposition 7.3 combines the above
        • Note the 3 proposition above works with LDF if we sub out the ultimate relativities

      • Proposition 7.4 and 7.5 are for incremental LDFs

  6. Distribution Method

    • Use Weibull for \(R_t^L\)

Finally there’s the method for accounting for aggregate charge with collective risk model or table M