A Mathematical Technique Of Computing Technical Provisions And Premiums In General Business Insurance Under The Influence Of Chain-ladder And Cape Cod Framework

ABSTRACT An insurance company promises its policyholders to pay out benefits if certain events occur, for example, events such as a car accident and health conditions. When this is happens, the insurance company has a liability to pay the claims by technical provisions or claim reserving. The calculation of claim reserving must be done carefully in such a way that it should not cause loss to the company. Two of the common methods to calculate technical provisions in non-life insurance are the chain ladder method (CL) and Cape Cod method (CC). The Chain-Ladder method (CL) uses an algorithm that…