| dc.description.abstract | Claim reserving for motor insurance business is critically important.This
has led to a slight mystery in motor insurance on how to go about claim
reserving for which claims has not yet come in and there are still some
figment of the future. One major critical problem in motor insurance has
always been on how to calculate appropriate incurred but not reported
claim reserve (IBNR) based on the data that is available on the claims that
has occurred. Identifying the most appropriate model to use in modeling
and estimating Incurred but not reported (IBNR) claim reserve in motor
insurance has made claim reserving more intricate coupled with risks of de lay and underwriting process. This study aimed at comparing the analysis
of IBNR in motor insurance using Bornhuetter Ferguson and Basic Chain
Ladder model and determining the most appropriate model to use in claim
reserving estimation in motor insurance so as to avoid and prevent com panies from going into financial insolvency. The objectives of this study
were; to estimate and compare outstanding motor insurance claim liabil ity in each development year,evaluating and comparing the total claims
for each particular accident year as well as to estimate and compare the
next year’s motor insurance outstanding liability. This was achieved by
applying the model in calculating outstanding reserves of motor insurance
which was then determined by summing up all individual outstanding lia bility in each development year. The statistical tool used was MS. Excel.
The estimates obtained from Bornhuetter Ferguson and Basic chain ladder
model was then examined to determine the one that best fit the data at
hand for any significant difference. This research recommended the use of
basic chain ladder model since the claim development pattern was stable
and there was a large amount of settled claim amount.However, both Ba sic Chain Ladder and B-F model should be applied cautiously, respecting
their circumstance under usage by combining them with their subjective
assessment of actuaries based on their expertise and experience. | en_US |
