ALAE Methods
· Posted in Insurance
ALAE Methods. Methods are similar to the paid loss development method, the reported loss development method, the Bornhuetter-Ferguson paid loss method, the Bornhuetter-Ferguson reported loss method, the reported count and average value method and the reported losses with de-trended average open claim. Average paid ALAE per closed claim was not used because ALAE often involve periodic payments and payments may not be related to the claims that are closed. An additional method, the reported ALAE as a percent of reported loss method, is similar to the reported count and average value method.
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