{"id":553,"date":"2020-06-27T09:56:57","date_gmt":"2020-06-27T04:26:57","guid":{"rendered":"https:\/\/theactuarialclub.com\/learn\/?p=553"},"modified":"2020-06-28T23:46:52","modified_gmt":"2020-06-28T18:16:52","slug":"cumulative-development-factors-cdfs","status":"publish","type":"post","link":"https:\/\/theactuarialclub.com\/learn\/terms\/cumulative-development-factors-cdfs\/","title":{"rendered":"Cumulative Development factors (CDFs)"},"content":{"rendered":"\n<div class=\"wp-block-columns is-layout-flex wp-container-core-columns-is-layout-28f84493 wp-block-columns-is-layout-flex\">\n<div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\" style=\"flex-basis:25%\">\n<div class=\"wp-block-buttons is-layout-flex wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link has-luminous-vivid-amber-background-color has-background\" href=\"https:\/\/theactuarialclub.com\/learn\/actuarial-gi-reserving\/selecting-development-factors\/\">&lt; Previous<\/a><\/div>\n<\/div>\n<\/div>\n\n\n\n<div class=\"wp-block-column ghostkit-d-md-none ghostkit-d-sm-none is-layout-flow wp-block-column-is-layout-flow\" style=\"flex-basis:44.8%\"><\/div>\n\n\n\n<div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\" style=\"flex-basis:25%\">\n<div class=\"wp-block-buttons is-layout-flex wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link has-luminous-vivid-amber-background-color has-background\" href=\"https:\/\/theactuarialclub.com\/learn\/actuarial-gi-reserving\/reserving-methods-in-gi\/\">Next &gt;<\/a><\/div>\n<\/div>\n<\/div>\n<\/div>\n\n\n\n<p class=\"has-background\" style=\"background-color:#d4edda\"><em>Cumulative claim development factors (a.k.a. age-to-ultimate factors and claim development factors to ultimate) are calculated by successive multiplications beginning with the tail factor and the oldest age-to-age factor and projects the total growth over the remaining valuations.<\/em><\/p>\n\n\n\n<p>Cumulative CDFs are often greatest for the most recent AYs and the smallest for the oldest accident years.<\/p>\n\n\n\n<p>Actuaries refer to the most recent, less-developed AYs as immature and the oldest, most-developed AYs as mature.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Calculating CDFs<\/h2>\n\n\n\n<p>Using the selected age-to-age factors from earlier exercises, calculate the following:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Selected tail\/ultimate factor = 1.00<\/li><li>CDF at 4 years= (selected tail factor) x (selected development factor 4-5 years) = 1.00 x 1.125= 1.125<\/li><li>CDF at 3 years= (selected tail factor) x (selected development factor 4-5 years) x (selected development factor 3-4 years)<br>= (CDF at 4 years) x (selected development factor 3-4 years) = 1.127 x 1.125 = 1.267<\/li><li>Continue in this manner until computing the Reported CDF at 1 year<\/li><li>= (CDF at 2 years) x (selected development factor 1-2 years) = 2.437<\/li><\/ul>\n\n\n\n<p>Try some of the calculation in the below exercise and see that if you have got it right!<\/p>\n\n\n\n<hr class=\"wp-block-separator\"\/>\n\n\n\n<div class=\"wp-block-columns is-layout-flex wp-container-core-columns-is-layout-28f84493 wp-block-columns-is-layout-flex\">\n<div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\" style=\"flex-basis:25%\">\n<div class=\"wp-block-buttons is-layout-flex wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link has-luminous-vivid-amber-background-color has-background\" href=\"https:\/\/theactuarialclub.com\/learn\/actuarial-gi-reserving\/selecting-development-factors\/\">&lt; Previous<\/a><\/div>\n<\/div>\n<\/div>\n\n\n\n<div class=\"wp-block-column ghostkit-d-md-none ghostkit-d-sm-none is-layout-flow wp-block-column-is-layout-flow\" style=\"flex-basis:44.8%\"><\/div>\n\n\n\n<div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\" style=\"flex-basis:25%\">\n<div class=\"wp-block-buttons is-layout-flex wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link has-luminous-vivid-amber-background-color has-background\" href=\"https:\/\/theactuarialclub.com\/learn\/actuarial-gi-reserving\/reserving-methods-in-gi\/\">Next &gt;<\/a><\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Cumulative claim development factors (a.k.a. age-to-ultimate factors and claim development factors to ultimate) are calculated by successive multiplications beginning with the tail factor and the oldest age-to-age factor and projects the total growth over the remaining valuations. Cumulative CDFs are often greatest for the most recent AYs and the smallest for the oldest accident years. [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[157],"tags":[],"class_list":["post-553","post","type-post","status-publish","format-standard","hentry","category-terms"],"acf":[],"_links":{"self":[{"href":"https:\/\/theactuarialclub.com\/learn\/wp-json\/wp\/v2\/posts\/553","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/theactuarialclub.com\/learn\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/theactuarialclub.com\/learn\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/theactuarialclub.com\/learn\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/theactuarialclub.com\/learn\/wp-json\/wp\/v2\/comments?post=553"}],"version-history":[{"count":7,"href":"https:\/\/theactuarialclub.com\/learn\/wp-json\/wp\/v2\/posts\/553\/revisions"}],"predecessor-version":[{"id":627,"href":"https:\/\/theactuarialclub.com\/learn\/wp-json\/wp\/v2\/posts\/553\/revisions\/627"}],"wp:attachment":[{"href":"https:\/\/theactuarialclub.com\/learn\/wp-json\/wp\/v2\/media?parent=553"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/theactuarialclub.com\/learn\/wp-json\/wp\/v2\/categories?post=553"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/theactuarialclub.com\/learn\/wp-json\/wp\/v2\/tags?post=553"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}