Actuarial modeling of health insurance claim reserves using the chainladder

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The preparation for outstanding claims is one of the main factors of technical provisions of Insurance company’s liabilities. Minimising the digression of the true amount of reserves from its estimation is one of the major actuarial challenges. Though the NHIA request the use of Chain Ladder method amidst the various actuarial models for reserve, most health insurance companies default in settling their claims on time leading to the pullout of some healthcare service providers in providing services to customers under the defaulters’ schemes. This thesis summarizes the salient techniques typically used for the estimation of outstanding claims reserves in non-life insurance specifically health insurance, including those to estimate the claims development. This research goes for estimation of health claim reserves in Ghana utilizing Inflation-adjusted chain ladder, Mack chain ladder and Bootstrap chain ladder technique. Claim data on Nationwide Medical Insurance Co. Ltd for my examination ranges from January 2008 to December 2017. Results indicate the Inflation-adjusted Chain Ladder had a superior reserve estimate than that of Mack Chain ladder and Bootstrap Chain Ladder methods.
A thesis submitted to the Department of Mathematics, Kwame Nkrumah University of Science and Technology in partial fulfillment of the requirement for the degree of Msc Actuarial Science,
Health insurance, Claim, Reserves, Chainladder