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Munich Chain Ladder: A Reserving Method that Reduces the Gap between IBNR Projections Based on Paid Losses

and IBNR Projections Based on Incurred Losses


by Gerhard Quarg and Thomas Mack

REPRINT ACKNOWLEDGMENT

Munich Chain Ladder by Dr. Quarg and Dr. Mack is being reprinted in Variance to give this important paper wider visibility within the actuarial community. The editors of Variance invited the authors to submit their paper for republication because we believe that the techniques described in their work should be known to all actuaries doing reserve analysis. We also hope to stimulate further research in this area. This paper is reprinted from Bltter der Deutschen Gesellschaft fr Versicherungs- und Finanzmathematik, volume 26, number 4, 2004, pages 597630. We thank the editors of that journal and the authors for allowing Variance to publish the paper.

KEYWORDS Reserving methods, chain ladder, loss development, reconciliation of paid and incurred projections

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