IBNR loss forecasting for Indian insurance companies - analysis of IBNR loss forecasting for Indian insurance companies and related regulatory reporting

Abstract

Insurance is an inherently risky industry, since its fundamental premise is centered around people paying “premiums” to offset their exposure to various specific categories of risk by placing the burden of that risk on an insurance provider. The insurance provider is able to shoulder this burden by collecting these premiums from diverse insurance contracts, so as to “pool” risk by ensuring the finances raised through these contracts can be drawn from in order to pay off a subset of claims. However, the more inherently risky the insurance category, the more severe the downside risk is, as greater fractions of customers will be put in positions to claim insurance payouts.