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

Key Points

• The aim is to address the discrepancies in IBNR projections derived from paid and incurred losses using the Munich Chain Ladder method.
• Reprinted analysis of the Munich Chain Ladder technique from a previous publication.
• Discussion of the method's application in reserving practice for actuaries.
• Overview of the importance of visibility and understanding of these techniques within the actuarial community.
• Shows that the Munich Chain Ladder method effectively narrows the gap between paid and incurred loss projections.
• Indicates that understanding these methodologies can enhance reserve analysis accuracy.
• Suggests the potential for further research in reserve methodologies.