Actuarial Reserving: Chain Ladder Reserving Method

[@Actuaryelle]

Question of the day: what is your favourite way to predict the future?

[@Ellellevlog]

Dart board.

[@pastir111]

I prefer quantitative models like, for example, asking the lady with Crystal Ball.

[@69Glitz]

Watch the Simpsons! 👀

[@falsey2760]

Making a really complex GLM or another type of models just because i can even tho it might have no real world use because real world doesnt move "optimally"

[@puckme6041]

tarot cards

[@dasomkim4732]

I started the journey of an actuary. I passed two exams, which was P and FM. I was going to take Exam IFM last March but it was canceled because of pandemic. Right now, I just started to search a job..! And then I came across your channel. It really helps me understand this job better. Thank you so much! :)

[@Actuaryelle]

Congratulations on P and FM. Stay safe for now, actuarial exams will be there once we are back to "normal" Thanks for watching 😊

[@educationfreedom3547]

Dasom same boat! Aiming for the November window now. Beefing up computer skills and refining my resume in the mean time.

[@TheJeldridge72]

Great energy and methodology. Hands down the most entertaining content on actuarial science on YT. While you’re primarily P&C, would love to see some content on health plan reserving and stochastic optimization- from models on both sides of the border. Also- we all know Les Québécois have culture, but can’t compare to Toronto on the coolness factor.

[@SaaryD]

This was incredibly informative. I'm a 2nd-year actuarial science student and this is definitely so informative and useful for my academic future. Thank you so much.

[@juliobarragan6212]

Je ne pense pas que ce sujet pourrait être expliqué d’une manière plus simple ... kudos to you !!!

[@Actuaryelle]

Aww you're very sweet 🥰

[@softballgirl64able]

This is an extremely well done presentation!!! I hope you continue to do more!!!

[@Actuaryelle]

You're so sweet. Glad you enjoyed it. You can find the PowerPoint tutorial that I used as inspiration to make the slides in the description of the video, if you want to see how I got those effects 😊

[@Propagwanda]

This is such a fantastic explanation of this process. Thank you!

[@Actuaryelle]

Glad you enjoyed it!

[@darkexcalibur87]

WOW this was an excellent video. I've been scouring the internet for content like this and I'm glad I found your channel!

[@Actuaryelle]

Thank you!

[@natty3036]

Your explanations are excellent. So easy to understand. Thank you

[@haidar2636]

amazing video, i hope your channel grows as much as it can

[@Actuaryelle]

You're very kind, thank you 😊

[@Cathiina]

Wow, Michelle. This was so very well explained! And thank you soooo much for showing the free material in the beginning. As a newly finished actuary from uni (who couldn’t find an actuary job), it is really nice to low key keep on studying♥️

[@donaldoloo4751]

That was simplified and clear to understand.

[@Actuaryelle]

Glad you enjoyed! Thanks for watching

[@sukadewakrsnananda1519]

hy my name is nanda and i just finished highchool this year, and thank you soo much you inspire me a lot to starting my journey to be an actuary. I hope you keep your work up, I really love to watch your videos

[@Actuaryelle]

Thank you for your kind words! Good luck with your actuarial journey 😊😊

[@SimoneSoleri]

Thank you so much Elle for this very informative video! You have excellent skills to teach and entertain at the same time. I'm an actuarial analyst in Italy and just found your channel. Thanks again for this explanation! :)

[@educationfreedom3547]

Thank you so much for these videos! Keep them coming! Any and all thoughts you have about resumes, interviews, and landing an entry level job will be much appreciated!

[@Actuaryelle]

My most recent resume is from 2012 so I definitely dont have much value to offer in that area, sorry. Thanks for watching 😊

[@INSURANCESTUDY]

You are the Best .... really very helpful .... Thank 😊 you .

[@anmollimbu738]

Your explanation is out of this world. Damn good

[@Actuaryelle]

Aw thank you 🥰

[@Ellellevlog]

Excellent PowerPoint skills 😉

[@Actuaryelle]

Probably exactly as good as yours!

[@liabookall6790]

Loooooool

[@Goku-wr5te]

This is the exact way, how my introvert personality talks to my extrovert personality. 😅

[@galiasuquet1746]

Excellent video! I keep coming back time and time again. Starting a new actuarial role and it is always good to keep these concepts fresh. Thank you

[@lisat7850]

Thanks ! explanation was very clear and with examples too !

[@sup5356]

Love it. Informative, concise and actually fun

[@sompisiphinda1417]

Thank you so much for this valuable information. Let me Case Reserve it so that I can Claim my spot on the pass list

[@Actuaryelle]

😂😂😂

[@UtubeUuse]

Great and insightful video. Thanks!!

[@rhyl9310]

I am not an actuary student or actuary or a future actuary :D but since I am an auditor handling an insurance client, then I am here. Lol. Thanks for these, really helps!

[@suddensunden6352]

Definitely, my favorite video and super well organized! Looking forward for more!

[@Actuaryelle]

Aw thank you 🥰

[@ThePersonjammer010]

You should continue tutoring Elle. Presentation skills and explanation skills are very good

[@ThePersonjammer010]

Consider tutoring* or lecturing

[@Actuaryelle]

@@ThePersonjammer010 Thank you for your kind words! I'm hoping that people learn a little something from this video (and future videos!)

[@sherlingchan5054]

Love your video! This is my favorite so far! I took STAM for THE LAST TIME this year!!! Tbh, because I don't have a chance working in the pricing industry + the chapter was quite brief, I found the concept rather vague (didn't know how but I managed to passed it.... pure luck.... ;P). I hated this topic, but your video has just enlighten it! It is actually very practical and straightforward! :) Wish I had watched your video at the beginning so didn't have to retake so many times... Haha (STAM - a new version of C, which added pricing/reinsurance/... including the contents of this video***). Please continue making more videos like this!!! :)

[@Actuaryelle]

So glad you enjoyed! Actuarial triangles are honestly such a fundamental concept in my day to day work. I hope you dont let 1 poorly taught exam spoil an interesting topic for you 😊😊😊

[@sherlingchan5054]

@@Actuaryelle Thanks Micheal! :)

[@natethomas9461]

Very easy to follow, appreciate it!

[@arunkumarsctce]

WOW.. simply awesome.. loved it

[@Actuaryelle]

Thanks for watching

[@diaryofyourtwenties]

This was extremely well done and very helpful. Thanks :)

[@maghnanisimran]

This was very helpful. Thank you so much!! Also, thanks for mentioning about the scary math in actuarial exams so reassuringly :)

[@johnwatson_2881]

Thank you Ma'am for concise Explanation. Would love to learn more about how LDFs are ascertained...

[@Actuaryelle]

You're very welcome. Thanks for watching!

[@mnmathnerd]

Oh my! an aspiring Actuary here, so excited I have found your channel!. What determines the ultimate value? is it when the claims are closed?. Is it possible to use insurance data e.g from Kaggle (which is close to the real life projects) to show the Actuarial techniques?, It would be immensely helpful to those joining the profession.

[@nikhiltrivedi9499]

My God !!!!!, You are Amazing 😍🙏

[@Actuaryelle]

Thank you for watching!

[@davenikkei4011]

I loved the effort you put on the presentation, nice job!!! please consider doing a follow up video with alternative reserve methods.

[@Actuaryelle]

Thank you for watching, Dave!

[@Cchamac0Oo]

Of course we want more videos like this one

[@Actuaryelle]

Glad you enjoyed it 😊

[@wilsonkhong8396]

I love how u made the explanation of reserving in P&C really simple to understand. Could you elaborate more on how to decide on the LDFs, as well as the different techniques in reserving such as the chain ladder, Bornhuetter-Ferguson method and the expected loss method?

[@Actuaryelle]

I make no promises on when I'll make these videos, but I'll add it to the list! Glad you enjoyed!

[@kevingaylord8620]

Extremely helpful! Thank you!

[@saileshkumar2171]

Hi Michelle! These videos are super helpful. I find the BF method (weight calculation) a bit difficult (using CDFs) and discounting of future claims to be a bit challenging. It would be great if you could make a video on that. Also if you could make a video on the Cape-Cod method and other useful methods (severity methods) that would be great. Additionally, I have just been introduced to Reserving methods, it would be great if you could make a video on what pricing is and what sort of tasks does a pricing actuary work with, that would be great!

[@josevalencia9233]

I really love contents like this. Furthermore, l passed out by laughing when in the fake example the LDF was always 1.1, 1.1, 1.1, 1.1. (too good to be true) =)

[@Actuaryelle]

Yeah reality isnt quite so consistent 😂

[@punyaswaroopsirigiri3568]

Thank you so much, it was very helpful.

[@MOHAMED-tc7pf]

Thank allot for the wonderful presentation 👌.....you cleared my mind

[@Actuaryelle]

You're very sweet! Have a great day!

[@siyuewang3892]

luv it!!!! Hope to see more videos like this from ur channel!!!!!!!!!❤❤❤

[@Actuaryelle]

Thanks for watching!! ❤❤

[@collinsanokye6857]

Actuary Elle, is there anyway we get get on-line/seminar on pricing and reserving basics on real data

[@94superconte]

This was incredible! Really clear and well-explained :) would you be able to share this PowerPoint presentation by any chance?

[@anshulkhandelwal1780]

Make it look so easy 👍🏻

[@PaquitoNarvaez]

Thank you!! This was super helpful

[@alecvan7143]

Wow that's a really nice PowerPoint

[@Actuaryelle]

You can find the tutorial I used as inspiration in the description of the video 😊

[@rikhilshah9109]

This was great - it was explained very well. Is it possible for you to do a video on the IELR and BF methods of reserving?

[@Actuaryelle]

I'll consider it! Thanks for watching ☺

[@rajendrasingh6321]

Hey, It was a really nice presentation and I definitely learnt something new from this video. I just wanted to ask if you can let me know how actuarial work is done in Life Insurance Companies?

[@Actuaryelle]

Ive never worked in life insurance, so I'm not familiar

[@rajendrasingh6321]

@@Actuaryelle One more thing I wanted to know that if I am getting a job opportunity without clearing any papers yet. Will it be good to accept the job offer?

[@puckme6041]

Can you please do a video on another loss reserving method, specifically the Bornhuetter-Ferguson method?

[@Actuaryelle]

I cant tell you when, but I'll add it to my video list 😊

[@shruthiiyengar6691]

Hey, Your video is really good. Will you be able to make a video on BF method.

[@adibzarhanzulkifli1303]

Super helpful content !

[@Actuaryelle]

Glad you enjoyed it!

[@yugalgarg]

Hey, I really liked your way of explaining. Could you please help us understand the Matching adjustment in life actuaries? It would be a great help for all of us Thanks

[@Actuaryelle]

I dont know anything about life insurance, unfortunately

[@yugalgarg]

@@Actuaryelle not a problem, i really liked your content and liked and subscribed immediately 😊

[@larissaneala8738]

very nice video! Thank you

[@Actuaryelle]

Thanks🥰 glad you enjoyed!

[@tobiaswieser3426]

This was super helpful! Thanks a lot!

[@Actuaryelle]

Glad you enjoyed 🥰

[@sarthakgupta6198]

Hi Elle, I really liked the video but I had a doubt. I was recently working on an MFI( Microfinance company), these MFI usually advances loan for a year or 2. We basically insure the life of the borrowers. I wanted to calculate the IBNR for these MFI based Portfolio. So considering the loan is advanced for only 12 and 24 months, the development months will be only 2( 12 and 24). Is it possible or right to carry out the same analysis provided we have only 2 development months?

[@collinsanokye6857]

How do we know that aggregated loss incurred over an accident year is fully developed?

[@69Glitz]

Hello Elle / Michelle, I found this video refreshing as I've already studied the chain ladder method in one of my courses and I just thought I would say that I think you covered it in such an easy-to-follow way. I was messing around editing videos to keep myself entertained over the isolation period and I've realised that editing videos is a skill within itself! I'm currently doing a MSc in Actuarial Management and will hopefully gain exemption from most of the IFoA exams, so I'll practically be a fully qualified Actuary come August (if there are no further postponements due to COVID 19). I've always been interested in working in another country so I was wondering if you think Canadian companies would be willing to recruit someone who has qualified through the IFoA? I think I have family in Canada so it would be an amazing place for me to consider working in the future. The Actuarial job market is very saturated in the UK and I'm not sure if this situation will make it harder, or whether more jobs will become available. It's only a thought but knowledge is power! I have 1 years experience working in a Life Office from a placement at university, so I have ended up specialising in Life Insurance & Investments, but I would be willing to work in any actuarial position 😁 Any information you could provide would be highly appreciated. I just wanted to note that I love the channel, A++ Regards, Gary.

[@Actuaryelle]

There are a few IFOA actuaries working at my company. I think as long as you get visas to work in Canada, you shouldn't have trouble because you're qualified with IFOA instead of the SOA. Good luck 😊 and thank you for your kind words!

[@69Glitz]

@@Actuaryelle Thanks for getting back to me with that information :-) I was going to ask for advice on where is best to look for entry level actuarial jobs in Canada, but I imagine it will have been a while since you've looked for them yourself! :-P

[@mananthakkar3470]

Could you please also explain the effect of grouping year on the reserves using an example? Also could you please recommend an open source material to understand the same?

[@moisesigarciaf]

¡Excellent! Thank you very much.

[@Actuaryelle]

You're welcome! Glad you enjoyed!

[@fishnotbanana4361]

Damn u good. You're easy to be understood and the powerpoint is on point (get it haha ok sorry)

[@Actuaryelle]

Thank you 😊

[@MM-ll2mz]

The case reserves, how do you determine a good approximation of how much money you should set aside? Do you get information about the claim that tells you what was damaged on the vehicle? Do you go by the book value of the car if the vehicle is new? Most likely if the vehicle is old there is a fair chance that the value of the car is LESS then the repair cost and in that case you would go with the book value I'm assuming?

[@Actuaryelle]

Depends on the line of business but initially, when the claim is opened, the system will assign an average severity to a claim. Then the adjuster assigned to the claim will update the case reserves as more information comes in (eg. Appraisal from a garage which estimates repair costs)

[@oromiadolobidena2032]

how to improve the accuracy of reserving?

[@briancaldarola3716]

Good morning Elle , I'm new in your channel. I would ask you a question, watching the video you've used the incurred loss triangle to evaluate the IBNR reserve, what about the evaluation of RBNS reserve? In which case would we use the cumulative paid loss triangle? Thanks in advance :)

[@Silverdkd]

Thank you so much fo sharing your knowledge. Could you explain in a new video about the Tail Factor?

[@Actuaryelle]

I dont have much to say about tail factors. Did you have any specific questions?

[@srivatsramaswamy963]

Hi Michelle, I have a question. Can you tell me the difference between a development triangle and a run-off triangle?

[@Actuaryelle]

Im not a reserving actuary so I might be missing some nuance, but I believe those are synonymous

[@Julia-rq7uj]

Hi Elle, could you explain what the incremental paid loss (Y_ij) of accident period i and development period j is?

[@Actuaryelle]

The triangles that I presented showed cumulative losses. The incremental loss would be the increase (or decrease) in loss amount as we go across a row

[@oromiadolobidena2032]

interesting video, thank you very much! my questions are: 1)what happens if the number of claims in columns side vary? 2) please can explain to me the word wage roll . thanks

[@saulfigueroa4116]

Hi Michelle, thanks for sharing. I am an actuary from Mexico, currently working in a British Life Insurance Company. Please could you suggest and explain any model for calculating reserves in a Solvency II for Life & Disability Groups?

[@Actuaryelle]

I know absolutely nothing about solvency II. I am not your girl - good luck!

[@Julia-rq7uj]

So the ultimate loss for a certain year is the sum of all the diagonal elements?

[@Actuaryelle]

No the ultimate loss would be the column on the right. The result of projecting an accident year forward infinitely many periods. The sum of the diagonal would give you the total incurred loss at a moment in time

[@Julia-rq7uj]

@@Actuaryelle ok thank you!

[@xinyanhuang3495]

Hi Michelle! I loved your videos and admired your presentation skills. Bit irrelevant, but could I ask how you learnt to make a great PowerPoint presentation like this? Did you do an online course, or was it taught at school, or did you just learn it at workplace. Thank you and I wish you all the best and stay safe!

[@Actuaryelle]

I linked the tutorial I used as inspiration in the description 😊 I mostly just learned over time

[@xinyanhuang3495]

Actuary elle Thank you :))

[@vatolocomoxo]

que buen videoooooo me encantó

[@mohammedhimda1599]

Thank you for this presentation, can you please explain to us another method such as Munich Chain Ladde or B-F method ?

[@Actuaryelle]

I'll add it to my to do list 😊

[@timothyxu5161]

One non-technical question~what are some of the primary reasons that there is a duration between "accident happens" and "claim reported"? The car owner's personal motivation?

[@Actuaryelle]

Yes. If it's a relatively minor accident, they may wait to report it. They might be deciding if it's a large enough claim to report, or if it's too close to the deductible that it's not worth it. There could also be lag if the loss occurs but the owner isnt aware of it, like a tree falling in your car while you're on vacation.

[@Actuaryelle]

Car insurance isnt a line of business with a ton of reporting lag. Youd see much larger lag in something like medical malpractice, where it might take years before the doctor gets sued for something they did years prior

[@ThePersonjammer010]

Can you do a video comparing different study manuals you used... Asm/actex/TIA/Coaching actuaries

[@Actuaryelle]

It's been so long, I don't think that I would bring much value to that topic. Maybe I'll research it one day. I think I saw Brea from Etched Actuarial has some videos on the different study manuals! Otherwise I recommend going on actuarial outpost or reddit to read about people's opinions on the various manuals

[@educationfreedom3547]

When it comes to exam FM, the Actex manual is much more of a “layman’s guide” than the Asm manual. It’s well structured with tiered difficulty levels. The asm manual really throws you in the deep end. It looks and feels like it is written for math majors, by math majors, and thus hard to parse. Boat loads of practice problems though. For exam P, the Actex manual was less friendly than the Couching Actuaries manual, but more thorough with more practice problems. Couching actuaries has ADAPT which makes up some of that difference. I think Actex is the way to go for both exams, but you may want to supplement that with a subscription to ADAPT. Whatever you decide, make 100% certain you can solve the released SOA questions. They are very representative of what you actually see on test day.

[@sunnyahuja8362]

Can you please tell me where I can work on real life actuarial projects based on loss reserving method or pricing using glm? Is there any website that you can suggest?

[@Actuaryelle]

Im not aware of any

[@royalzikhali5295]

Hi elle, im a Second year Actuarial Science student in south africa and really appreciate your videos. I just would like to know how the lockdown/COVID-19 tjing has affected your work and field as an actuary.

[@Actuaryelle]

Hi! I'm working from home, business as usual. Lots of work trying to make pricing changes that will relieve some financial pressure on our insureds, but otherwise everything is pretty normal. Skype meetings instead of in person meetings. Stay safe!

[@royalzikhali5295]

@@Actuaryelle Than k you, stay safe to you too

[@abhim7]

Why values are increasing from left to right?

[@huzaifarazi4465]

Excellent

[@bruhmomentb2977]

Hi I’m a senior in high school graduating this year in the us and I’m going to an actuary program next year in college when should I start studying for exams such as p and fm

[@Actuaryelle]

I took my first exam in my second semester of university, but my degree was 3 years, not 4. I'm sure your actuarial program at university will give you recommended timing for taking exams. No need to rush and start now (unless you really want to start early - then go for it!)

[@aydnylmaz6161]

Allah razı olsun bacım

[@rishabprakash2541]

Can you please make a video about the level of competition in this field. Since I am still in school I am really worried about this matter.

[@Actuaryelle]

You mean competition in the job market?

[@GeneralHuan]

Can i have your chain-ladder presentation (.ppt file)? Thank you.

[@Actuaryelle]

No, sorry. Thanks for watching

[@gw4583]

Is there a life version of you??? Please tell me where to find one.

[@Actuaryelle]

😂 I am real

[@gw4583]

@@Actuaryelle I mean a life actuary who publishes educational videos like you! So informative!

[@actsci7850]

What do you like and dislike about working in P&C? How does work in a data science/predictive analytics team in P&C differ from what the actuaries do?

[@Actuaryelle]

Good questions! I'll add them to my video list

[@BontleTladi]

Hey hey , please enlighten me there , I'm still in high school. Is actuarial science studies at university based on math only ?

[@Actuaryelle]

It's a good mix of math and finance courses. If your program hasn't done it already, I'd recommend adding some computer science classes as well.

[@Lulu-pv7rz]

Thank you so much

[@lisat7850]

Can you create something on how Increased Limit Factors (ILFs) are derived and used in practice with examples ? Thank you :)

[@kyrosalmeida3752]

How did you get so good at making ppt

[@Actuaryelle]

Practice and googling random PowerPoint tricks

[@reformed5786]

Hi there, is it still easy to find an actuarial job right out of college, is the job market saturated. If it is easy, do you think it is still easy to find jobs within the next decade?

[@Actuaryelle]

I imagine that would depend on where you live. Here in Toronto we are still hiring entry level actuaries.

[@reformed5786]

@@Actuaryelle Are you guaranteed a job with 2-3 exams passed?

[@Actuaryelle]

@@reformed5786 You still have to be employable: technical skills like excel, communication skills, critical thinking etc all play a part. If you can pass exams but can't do the work, then you're not guaranteed a job.

[@reformed5786]

@@Actuaryelle thank you for the information. I still have some more questions though. Can we still become an actuary without knowing any programming language?

[@reformed5786]

@@Actuaryelle thank you for the information. I still have some more questions though. Can we still become an actuary without knowing any programming language?

[@GarimaLongiany]

Thanks

[@robertocerminara7968]

Hi elle, i’ m new from this channel. I was asking to my self if u can help with a project. I need to find a runoff triangle from a new zealand insurance company but on internet i was not able to find anything. Could u oleaste help me? Thank you

[@Actuaryelle]

I have no idea. Maybe send an email to the new Zealand society of actuaries?

[@davideruggeri7240]

I'm just a studente, but I should say this is an old school method, with big data you can calculate reserves for each claims without aggregating by accident and development periods

[@Actuaryelle]

How would you estimate claims that havent been reported yet?

[@BeatrizVieira-dt5so]

Maravilhoso!!!!!

[@nadillahkhoirani1547]

thank u i love you

[@Actuaryelle]

Thanks for watching!

[@kunaljuneja1601]

Can you complete exam 5 playlist pls pls 🥺

[@Actuaryelle]

Im definitely not going to spend hundreds of hours creating a free video course for exam 5, but if there's a specific topic that you don't understand, I can try to explain it 😊

[@kunaljuneja1601]

@@Actuaryelle Yes, Rate level Indication, the losses trending n all is so confusing sometimes. Can you give a real life picture of how losses are tended in different situations, that would be helpful.❤️

[@Acacpmr]

Sorry! Если можно, то спрошу на русском языке. Извиняюсь, но я тока учусь актуарскому делу. Не могу понять 38358 это реально выплаченный ущерб? Если да, то как получено число за 2016 год 38154?

[@ypey1]

I noticed insurance stock prices dropped like a brick!?

[@Actuaryelle]

The whole market has been dropping. Wild times we are in at the moment..

[@ypey1]

@@Actuaryelle would you buy insurance stocks? knowing the business

[@reformed5786]

first to comment

[@Actuaryelle]

Woo!