Loss Development Factors

Tutorial

The purpose of the Loss Development Factors (LDFs) page is to develop losses to an ultimate level. The ultimate cost of claims for a specific time period is usually not known until several years after the close of that period. Therefore, loss development factors are used to project the additional cost expected on claims associated with each loss period. These factors quantify the late developing aspects of certain losses, such as claims involving medical complications not recognized in the early stages of treatment or verdict values for litigated claims which are different than the amount which was reserved to pay the claims. LDFs also account for losses that occurred during the policy period, but are not reported until a later date. These losses are commonly referred to as incurred but not reported losses, or IBNRs.

You can click the button "Click to use user-supplied LDFs" to enter your own LDFs if you have those available. The button then will say "Click to use system-supplied LDFs" so that you can return to the system factors if desired. See the video for more information:

Loss Development Factors video

Videos

Loss Development Factors

FAQs

If I have a client’s loss development history, can I use that data in Loss Forecaster?

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