The Default Period Estimates form the basis for estimations at the business. For example, you can provide a pattern at the Portfolio Program of how the premium is written over two years. You have percentages as estimation defaults. These percentages can be used at business (section) level to calculate the estimations.
Default Period Estimates are values that are usually produced by an actuary. Default Period Estimates can, for example, represent the development of the loss ratio of a portfolio.
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Four variables that can be used in the Calculation Rules for calculating IBNR and Loss Ratio on an ultimate basis are uploaded from an external file. The upload can be executed from the System Administration Utility. In the Inbound Interfaces folder there is an icon called Ultimate Loss Ratio Import. Just double-click that and the file selection window opens up. Then select the external file that contains the data that shall be uploaded.
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To get an overview of the estimations done on the Assumed Business you can use the Underwriters Estimates window / Period Estimates tab on the Portfolio Program. You can also make adjustments to these estimations.
On the Period Estimates tab of the Portfolio Program you can see the sum of estimations of all Assumed Business connected to the Portfolio Program section. You also see the various estimation currencies used on the business.
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Losses within the same category often develop in similar ways over time. Specific patterns of loss development can help the underwriter to e.g. calculate IBNR reserves.
Loss Development Pattern selected on Portfolio Program is inherited to linked Assumed Businesses. Inherited Loss Development Pattern can be overridden on Assumed Businesses - values can be changed or a completely different Loss Development Pattern can be selected.
Register Incurred Development Curve: # Open Underwriters Estimates and select the Loss Development Pattern tab Select to open the Incurred Development Curve subtab in edit mode Click the edit button next to Loss Development Pattern field and select wanted pattern Save the selected Loss Development Pattern If required, make changes to Number of Months and values Save Register Paid Development Curve: # Open Underwriters Estimates and select the Loss Development Pattern tab Select to open the Paid Development Curve subtab in edit mode Click the edit button next to Loss Development Pattern field and select wanted pattern Save the selected Loss Development Pattern If required, make changes to Number of Months and values Save Register a second Incurred Development Curve: # Open Underwriters Estimates and select the Loss Development Pattern tab Select to open the Incurred Development Curve 2 subtab in edit mode Click the edit button next to Loss Development Pattern field and select wanted pattern Save the selected Loss Development Pattern If required, make changes to Number of Months and values Save Register a second Paid Development Curve: # Open Underwriters Estimates and select the Loss Development Pattern tab Select to open the Paid Development Curve 2 subtab in edit mode Click the edit button next to Loss Development Pattern field and select wanted pattern Save the selected Loss Development Pattern If required, make changes to Number of Months and values Save Your system may have been set up to automatically update Loss Development Curves whenever an update is made in system parameters.
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The Ultimate Loss Ratio reflects the worst case scenario for a risk, and is used to calculate for example IBNR reserves. The fields can be registered in Underwriters Estimates at Portfolio Program level, and can be used in the calculation of Underwriters Estimates on linked Assumed Businesses.
In addition, you can register one or two IBNR Methods which can be used to determine the formula to be used when calculating IBNR on linked Assumed Businesses.
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