One such method is the loss ratio method, also known as the additive method, which uses volumes as an additional input.The additive reserving model assumes the existence of volume measures such that the corresponding expected loss ratios are identical for all accident years. While classical literature assumes these volumes are known, in practice, accurate volume measures are often unavailable
A Maximum likelihood approach for uncertain volumes
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One such method is the loss ratio method, also known as the additive method, which uses volumes as an additional input.The additive reserving model assumes the existence of volume measures such that the corresponding expected loss ratios are identical for all accident years. While classical literature assumes these volumes are known, in practice, accurate volume measures are often unavailable