Available for viewing or download, the educational videos below are free of charge and free of ads.
Disclaimer: Information presented in these videos should not be relied upon as actuarial or accounting advice, which should be provided by a credentialed actuary or accountant familiar with the details of your organization’s risk management program.
Prior Year Development
Prior year development is a common but nuanced concept in the P&C insurance industry. In this video, we define prior year development and clarify its meaning with examples. This term goes by many names, such as adverse development or favorable development. If you’ve ever wondered if “reserve strengthening” is a good or bad thing, this video is for you.
How to Read a Loss Triangle
In this video, we discuss the basics of loss triangles, including such concepts as accident year, maturity, and loss evaluations. Loss triangles are the bread and butter of actuarial work in the P&C insurance industry and can be used for a wide variety of diagnostic and analytical purposes, including the estimation of loss reserves.
Loss Development Patterns
This video describes loss development patterns, with a focus on incurred and paid accident year development. Loss development is a fundamental concept in P&C actuarial work. In this presentation, we discuss the topic from a high level and provide an example of how loss development patterns are used to calculate ultimate loss.
Bornhuetter-Ferguson Method for Loss Reserves and IBNR
In this video, we discuss the Bornhuetter-Ferguson method (BF method), a popular technique for estimating ultimate loss and loss reserves in P&C insurance. We start with a high-level view of the method and highlight the fundamental concepts that insurance professionals need to understand.
Policy Year, Calendar Year, and Accident Year
This video describes the difference between policy year year and calendar year for premiums and policy year and accident year for losses. Policy year, accident year, and calendar year are common ways to organize insurance data.
What is IBNR?
This video, part of the loss reserving fundamentals series, defines IBNR, or “incurred but not reported”.
IBNR is described in relation to case reserves and overall loss reserves. Four of the main sources of IBNR are discussed.
For the purpose of simplicity, this informative video uses insurance terms in their general sense. For example, “insurers” may refer to commercial insurance carriers or organizations retaining loss through high deductible programs. The term “loss” is used generally, rather than specific references to “loss and expense”.
Tail Liability Explained
This video provides a clear illustration of how tail liability arises from claims-made coverage.
How to Create a Loss Triangle
This video is an introduction to loss triangles and is intended for viewers with little or no familiarity with the topic. We’ll explain the basic concepts of loss triangles while creating an example triangle from a series of loss runs. Loss triangles are commonly used by actuaries for loss reserving, pricing, and other analytical purposes.
How to Interpolate Loss Development Factors
This video demonstrates how to interpolate loss development factors using two simple interpolation techniques. Loss development factors (LDFs) in the form of age-to-ultimate factors (ATUs) are commonly used by actuaries for loss reserving, pricing, and other analytical purposes.
Loss Development Factors – Part 1: Calculating LDFs
This video demonstrates how to calculate loss development factors by way of an example. It is the first video in a series covering loss development, its applications, and common issues and pitfalls. Loss development factors (LDFs) in the form of age-to-ultimate factors (ATUs) are commonly used by actuaries for loss reserving, pricing, and other analytical purposes.
Loss Development Factors – Part 2: Use LDFs to Estimate Ultimate Loss
The second in the series, this video demonstrates how to use loss development factors to estimate ultimate loss.
Loss Development Factors – Part 3: Calculate Loss Reserves & IBNR from Ultimate Loss
The third in the series, this video demonstrates how to use estimate loss reserves and IBNR from the ultimate loss we estimated in Part 2.
Loss Development and Bornhuetter-Ferguson Methods – A Visual Approach
This video demonstrates the mechanics of the loss development methods and the Bornhuetter-Ferguson methods with the help of several graphical illustrations. The loss development and BF methods are the most commonly used actuarial techniques for estimating ultimate losses and loss reserves.
How to Estimate Interim Loss Reserves (for Self-insureds)
This video describes a common method for calculating interim loss reserve estimates, that is, estimates that are needed between formal actuarial evaluations. We also briefly discuss how interim estimates vary from actuarial estimates. This topic is most relevant to organizations that self-insure some or all of their occurrence-based P&C exposure, such as workers compensation or general liability. Methods for claim-made coverages are more complicated and not addressed in this video.
A Better Way to Present Loss Reserves (for Self-Insureds)
In this video, I share a simple approach to make loss reserve reports for self-insureds more user-friendly. Rather than providing self-insureds with a reserve balance, I describe how to calculate financial statement changes and compare these changes to budgeted amounts. This topic is intended organizations that self-insure their P&C exposure, such as workers compensation, general liability, or medical malpractice.