Advantages and Disadvantages of Loss Reserving Methods in Non-Life Insurance

Jelena Kočović, Mirela Mitrašević, Dejan Trifunović

We analyse characteristics of the three most commonly used methods for estimating loss reserves in non life insurance: the chain ladder method, the loss ratio method, and the Bornhuetter-Ferguson method. Our aim is to give a comparative analysis of the results obtained from applying these methods to a practical case, and to put emphasis on their advantages and disadvantages.