Financial Innovation

Table 14 Risk adjustments using WT

From: Claim reserving for insurance contracts in line with the International Financial Reporting Standards 17: a new paid-incurred chain approach to risk adjustments

		\(\eta = 0.10\)		\(\eta =0.05\)		\(\eta =0.01\)
		RA	RA (%)	RA	RA (%)	RA	RA (%)
Bodily injury	Empirical CDF	285,504	3.94	368,985	5.09	528,895	7.29
	Moment-based	285,638	3.94	369,381	5.09	531,055	7.32
	Normal	278,845	3.85	357,856	4.94	505,752	6.97
	Log normal	283,130	3.90	364,965	5.03	519,846	7.17
Direct compensation	Empirical CDF	11,454	7.11	14,718	9.14	20,843	12.94
	Moment-based	11,454	7.11	14,717	9.14	20,837	12.94
	Normal	11,407	7.08	14,638	9.09	20,671	12.83
	Log normal	11,770	7.31	15,222	9.45	21,766	13.51
Accident benefit	Empirical CDF	361,243	5.53	468,546	7.18	676,108	10.35
	Moment-based	361,284	5.53	468,625	7.18	676,152	10.35
	Normal	348,993	5.34	447,905	6.86	633,286	9.70
	Log normal	356,338	5.46	460,193	7.05	658,117	10.08

All RA amounts are in thousands in Canadian dollars

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