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Foundations of Casualty Actuarial Science

d) Losses and loss adjustment expenses - Amounts
paid or payable to claimants under the terms of insurance
policies are referred to as losses. Paid losses are those
losses for a particular period that have actually been
paid to claimants. Where there is an expectation that a
payment will be made in the future, a claim will have an
associate case reserve representing the estimated
amount of that payment.

The sum of all paid losses and case reserves for a specific
point in time is known as the accident year case-incurred
losses. The term case-incurred is used to distinguish this
statistic from ultimate incurred losses, which include
losses that have not yet been reported to the insurance
company as of the case-incurred evaluation date.

Over the time, as more losses are paid and more
information becomes available about unpaid claims,
accident year-case-incurred losses will tend to approach
their ultimate value.

Generally, because of the reporting of additional claims

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