Estimated total loss amount for an accident year once all development is complete, including IBNR and residual reserves.
Ultimate loss is the total expected final cost of claims for an accident year, estimated by actuarial projection from the run-off triangle. It includes payments already made, reserves for open RBNS claims and IBNR (unreported or underestimated claims). The ultimate is only known with certainty once the year is fully run off, which can take many years in long-tail lines. The objective of reserving is to estimate the ultimate as accurately as possible from the earliest development years. The gap between the eventually observed ultimate and the initially estimated ultimate measures the reserving error (run-off result).
Liability accident year 2020: paid + RBNS cumulative = 8.5 M EUR at year-end 2023. Estimated IBNR = 2.1 M EUR. Ultimate loss = 10.6 M EUR. Actuarial uncertainty: ± 1.2 M EUR.
ultimate loss, ultimate claim cost, ultime, sinistres à l'ultime, coût final