Statistical Methods Of Estimating Loss Reserves In General Insurance

Relevant estimation of loss reserves related to general insurance activity was and is one of the most important issues for insurance companies. Maintenance of loss reserves at the right level repre-sents the key condition of insurance monitoring authorities as the result of performance indicators of their activity depends on the value of these reserves. The forecasted value of future loss referred to prior events represents the loss reserve. In this paper, we present stochastic methods (Christofides method) of estimating the loss reserves, especially those of incurred but not reported reserves. The stochastic methods presented in the paper, in contrast to the determinist ones, adjust the result better and offer more information referring to the quality of data and exactness level of damage reserve forecast.