Abstract:
Due to unprecedented increase in motor insurance coverage, insurance companies are
more focus on their financial reporting and general actuaries desire to incorporate
more statistical concepts into their daily responsibilities, such as reserve estimates.
Recognizing this increased financial oversight, this paper considers develop a model
to estimates the Incurred But Not Reported Claims Reserves (IBNR) for Sri Lankan
Auto Insurance Market, specifically geared for the work of general actuaries in auto
insurance industry. Development factor method also known as completion factor
method with the chain ladder approach used to derive the IBNR estimate as a
deterministic approach and the regression approach used to develop a model to
estimate IBNR for the most recent months. However, combining framework for both
methods is important on the same problem. Using the both deterministic and
statistical methods, identify the linear and log linear regression models to estimate the
IBNR claims for the recent months and then the total estimates throughout the time
period after comparing the estimated values with the values obtained from the
completion factor method. The developed models will geared for the work of general
actuaries in auto insurance in Sri Lankan insurance industry and this will serves to
stimulate further research and development of innovative techniques for
accurate IBNR predictions.
