The Kittel study note (page 319) outlines the ULAE reserve as
(1/2 x Ratio x Incurred Loss) + (Ratio x IBNR Reserve).
=> where the ratio is determined either by the traditional method or
by Kittel’s method.
However, both question #58 from fall 1994 and question #63 from fall
1996 use the formula:
½ x Ratio x (Total Reserves + IBNR).
I don't get the same answer with both formulas. Does anyone know what
the difference is, and where that second formula came from?
Scott Lennox.