Application of claims reserving methods in medical insurance
Abstract
This research project aims to estimate outstanding claims and incurred but not reported (IBNR)
reserves in medical insurance. The standard actuarial techinique; the chain ladder techinique
is given a sound statistical foundation and considered as a linear model. The Inflation adjusted
chain ladder method and completion factor method which are applications of the Basic chain
ladder techinique are employed for purposes of estimating outstanding outsatnding claims and
predicting the IBNR claims in medical insurance. It is due to the continued need for better
health care that the insurance medical providers need to have a better reserving mechanism
to counter any unanticipated claims that can lead them to insolvency. Actuarial judgement
needs to be used, even with the application of statistical methods for the calculation of IBNR
and estimation of outsatnding claims since the prediction for months with the most unpaid
claims has most uncertainity. Therefore, the study looks for a detailed example of calculation
of IBNR and estimation of outstanding claims to come up with a better advise as for the case
in Kenya where medical bussinesses are booming but little care or consideration is given to
reserving for tomorrow.
Citation
M.Sc (Actuarial Science)Sponsorhip
University of NairobiPublisher
School of Mathematics, University of Nairobi