PROCEEDINGS May 15, 16, 17, 18, 2005 - Casualty Actuarial Society

ESTIMATING THE WORKERS COMPENSATION TAIL 595FIGURE 2.1Configuration of SAIF’s MPD Paid Loss DataAYs 1966 through 2002. This region is the triangle labeled “C”to designate that cumulative paid losses are available for all ofthese AYs. In addition, since calendar year 1985, incrementalMPD payments have been captured for AYs 1926 through 1965for DYs 29 and higher. This region is the diagonally shapedarea labeled “I” to designate that only incremental payments areavailable.2.1. The Mueller Incremental Tail MethodGiven the availability of the incremental paid data for DYswell beyond the standard triangle of cumulative paid losses, andthe value of such information in more accurately estimating thetail, a method was devised to utilize this data. It was designedby Conrad Mueller, ACAS, and is based on decay ratios of incrementalpayments. We will use SAIF experience as an exam-