Chain-ladder method

The chain-ladder or development method is a prominent actuarial loss reserving technique. The chain-ladder method is used in both the property and casualty and health insurance fields. Its intent is to estimate incurred but not reported claims and project ultimate loss amounts.The primary underlying assumption of the chain-ladder method is that historical loss development patterns are indicative of future loss development patterns. The chain-ladder or development method is a prominent actuarial loss reserving technique. The chain-ladder method is used in both the property and casualty and health insurance fields. Its intent is to estimate incurred but not reported claims and project ultimate loss amounts.The primary underlying assumption of the chain-ladder method is that historical loss development patterns are indicative of future loss development patterns.