Im using one of the Bornhuetter-Ferguson (B-F) method templates to project losses. Where can I find information to help me select an expected loss ratio?
The expected loss ratio is the ratio of anticipated losses to earned premiums. The B-F method assumes that the expected loss ratio is predictable. However, in some cases, an appropriate loss ratio may be difficult to select. For example, instability in accident year loss ratios may make this difficult. Keep in mind that pricing inconsistency may affect whether premium is an accurate measure of exposure. ReservePro contains several reports to help you make more effective use of the B-F methods. The loss reports labeled “Preliminary Selected Ultimate Loss Rate” and “Preliminary Selected Ultimate Loss Ratio” are designed to help you make these types of selections. The reports calculate a preliminary selected ultimate based on a weighted average of the paid and incurred loss development methods. The weights are derived from the inverse of the selected development factors, which inherently gives more weight to the more fully developed incurred method. These reports provide a good place to s
