A fresh look at actuarial reserving methods

The paid chain ladder and the incurred chain ladder are two of the most frequently used methods that actuaries use to develop indicated loss reserves for property and casualty companies. Their popularity stems from both their ease of use and simple familiarity. However, there are other reserve analysis methods, such as Bornhuetter-Ferguson, that can prove extremely valuable. Actuaries are advised to consider using these less-common methods where appropriate.

This article was first published in the May/June issue of Contingencies.