# About Run-Off Triangle **URL:** \ **Category:** Property/Casualty\ **Created:** [March 30, 2023, 5:01pm UTC](https://community.goactuary.com/t/about-run-off-triangle/7681 "2023-03-30T17:01:17Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![Lucy](https://community.goactuary.com/user_avatar/community.goactuary.com/lucy/32/8802_2.png) [@Lucy](https://community.goactuary.com/u/Lucy)\ **Post date:** [March 31, 2023, 8:14am UTC](https://community.goactuary.com/t/about-run-off-triangle/7681/22 "2023-03-31T08:14:41Z")
> [@lenovo](#): > > I agree, there might be losses beyond the agreed amount, but can we consider it as outliers ? I dunno. What’s the line of business? How much development do you see after 48 months? What’s the statute of limitations on the type of claim and how long did they usually take to be resolved after they are brought to the attention of the courts? Fwiw, i usually use at least 10 years in my triangles. Sometimes 15. But if you are looking at auto physical damage 4 years is probably plenty. Jurisdiction matters, too. ---
**Author:** ![CuriousGeorge](https://community.goactuary.com/user_avatar/community.goactuary.com/curiousgeorge/32/28457_2.png) [@CuriousGeorge](https://community.goactuary.com/u/CuriousGeorge)\ **Post date:** [March 31, 2023, 1:52pm UTC](https://community.goactuary.com/t/about-run-off-triangle/7681/23 "2023-03-31T13:52:07Z")
I would say it’s not better to use a 48 month triangle. It’s better to use a 60 or 72 month triangle (plus any older AY’s you have available) and then use the data to convince yourself that a 1.0 factor is/isn’t appropriate at 60-ultimate. I frequently assume that development after a certain point isn’t material and set factors to 1.0, but that’s **after** reviewing historic activity and looking at the reserving impact of that choice. ---
**Author:** ![dr\_t\_non-fan](https://community.goactuary.com/letter_avatar_proxy/v4/letter/d/a8b319/32.png) [@dr\_t\_non-fan](https://community.goactuary.com/u/dr_t_non-fan)\ **Post date:** [April 1, 2023, 2:36am UTC](https://community.goactuary.com/t/about-run-off-triangle/7681/24 "2023-04-01T02:36:22Z")
> [@lenovo](#): > > Let say a scenario that one person use 60 months development period, but the claims after 48 months is rarely occurred. How can one convince the other person that it is better to construct a triangle with 48 months period ? Are you running out of memory or something? ---
**Author:** ![DeepPurple](https://community.goactuary.com/user_avatar/community.goactuary.com/deeppurple/32/1551_2.png) [@DeepPurple](https://community.goactuary.com/u/DeepPurple)\ **Post date:** [April 2, 2023, 11:12pm UTC](https://community.goactuary.com/t/about-run-off-triangle/7681/25 "2023-04-02T23:12:32Z")
> [@lenovo](#): > > Let say a scenario that one person use 60 months development period, but the claims after 48 months is rarely occurred. You still have to reserve for the all the claims that happen even if they are uncommon or rare. ---
**Author:** ![lenovo](https://community.goactuary.com/user_avatar/community.goactuary.com/lenovo/32/29469_2.png) [@lenovo](https://community.goactuary.com/u/lenovo)\ **Post date:** [April 6, 2023, 9:12am UTC](https://community.goactuary.com/t/about-run-off-triangle/7681/26 "2023-04-06T09:12:51Z")
No… just hypothetical question ---
**Author:** ![dr\_t\_non-fan](https://community.goactuary.com/letter_avatar_proxy/v4/letter/d/a8b319/32.png) [@dr\_t\_non-fan](https://community.goactuary.com/u/dr_t_non-fan)\ **Post date:** [April 6, 2023, 3:38pm UTC](https://community.goactuary.com/t/about-run-off-triangle/7681/27 "2023-04-06T15:38:14Z")
> [@lenovo](#): > > No… just hypothetical question. Are you doing it by hand? If not, make the triangle as big as you want it, then see how different your IBNR is. Then, show-and-tell time. ---
**Author:** ![jerrytuttle](https://community.goactuary.com/user_avatar/community.goactuary.com/jerrytuttle/32/759_2.png) [@jerrytuttle](https://community.goactuary.com/u/jerrytuttle)\ **Post date:** [April 7, 2023, 4:00pm UTC](https://community.goactuary.com/t/about-run-off-triangle/7681/28 "2023-04-07T16:00:51Z")
> > There might be losses beyond the agreed amount … Do you mean covered losses in excess of the policy limit? Sure. Allocated loss adjustment expense is a common reason, which are often in addition to the policy limit and are unlimited.. Perhaps there is a per person limit of liability, but no aggregate limit. Perhaps there is a per coverage limit of liability, but no aggregate limit. Perhaps there is some sort of punitive damage award that is above the policy limit and is deemed to be covered by the insurance. There is often a good story behind such claims. For pricing, the question is whether you should throw these claims out because they are flukes that will never happen again, or are they symptomatic of something that can very well happen again. ---
**Author:** ![lenovo](https://community.goactuary.com/user_avatar/community.goactuary.com/lenovo/32/29469_2.png) [@lenovo](https://community.goactuary.com/u/lenovo)\ **Post date:** [April 8, 2023, 9:15am UTC](https://community.goactuary.com/t/about-run-off-triangle/7681/29 "2023-04-08T09:15:33Z")
i think executive who has no background in actuarial science might ask why the loss triangle has a long development period and ask whether if the loss triangle with less development triangle will produce a better result ---
**Author:** ![dr\_t\_non-fan](https://community.goactuary.com/letter_avatar_proxy/v4/letter/d/a8b319/32.png) [@dr\_t\_non-fan](https://community.goactuary.com/u/dr_t_non-fan)\ **Post date:** [April 8, 2023, 6:53pm UTC](https://community.goactuary.com/t/about-run-off-triangle/7681/30 "2023-04-08T18:53:04Z")
That is what show-and-tell time is for. You tell people you’ve done the comparison, and you show your work. I don’t think there is one answer here. Depends on the line of business and the company. ---
**Author:** ![Vorian\_Atreides](https://community.goactuary.com/user_avatar/community.goactuary.com/vorian_atreides/32/65623_2.png) [@Vorian\_Atreides](https://community.goactuary.com/u/Vorian_Atreides)\ **Post date:** [April 8, 2023, 10:20pm UTC](https://community.goactuary.com/t/about-run-off-triangle/7681/31 "2023-04-08T22:20:20Z")
FWIW, if you’re setting reserves, you don’t ignore a claim just because it’s inconvenient (for whatever reason). Nor is using the assumption that "all claims are ‘fully developed’ at x months when you know you’ll have some claims that develop beyond that time frame going to be very useful no matter what your business philosophy is . . . at least, if you want to remain solvent long-term. ---
**Author:** ![DeepPurple](https://community.goactuary.com/user_avatar/community.goactuary.com/deeppurple/32/1551_2.png) [@DeepPurple](https://community.goactuary.com/u/DeepPurple)\ **Post date:** [April 10, 2023, 2:17pm UTC](https://community.goactuary.com/t/about-run-off-triangle/7681/32 "2023-04-10T14:17:24Z")
You don’t have to only look at an incurred loss triangle. You can look at a claim count triangle (or claims outstanding triangle) You could look at paid. You could look at a paid as a percent of incurred triangle. You could look at case reserves. I have worked with a casualty triangle with open case reserves at 40 years. 40 freaking years. And that wasn’t A&T. With A&T, all bets are off. That’s much much worse. If you have open case reserves after N months, you have very likely loss development _after_ N months. ---
**Author:** ![Maphistos\_Sidekick](https://community.goactuary.com/user_avatar/community.goactuary.com/maphistos_sidekick/32/84973_2.png) [@Maphistos\_Sidekick](https://community.goactuary.com/u/Maphistos_Sidekick)\ **Post date:** [April 10, 2023, 3:02pm UTC](https://community.goactuary.com/t/about-run-off-triangle/7681/33 "2023-04-10T15:02:04Z")
I just noticed that what had been the oldest open claim in my data finally closed – it was over 55 years old. ---
**Author:** ![NormalDan](https://community.goactuary.com/user_avatar/community.goactuary.com/normaldan/32/1013_2.png) [@NormalDan](https://community.goactuary.com/u/NormalDan)\ **Post date:** [April 10, 2023, 4:18pm UTC](https://community.goactuary.com/t/about-run-off-triangle/7681/34 "2023-04-10T16:18:44Z")
— Meanwhile at the claims adjuster desk — Well guys, today’s my last day before retirement… oh shit lemme just close this rq ---
**Author:** ![SpaceLobster](https://community.goactuary.com/user_avatar/community.goactuary.com/spacelobster/32/38216_2.png) [@SpaceLobster](https://community.goactuary.com/u/SpaceLobster)\ **Post date:** [April 12, 2023, 3:54pm UTC](https://community.goactuary.com/t/about-run-off-triangle/7681/35 "2023-04-12T15:54:29Z")
How does that even happen? ---
**Author:** ![tommie.frazier](https://community.goactuary.com/letter_avatar_proxy/v4/letter/t/b5a626/32.png) [@tommie.frazier](https://community.goactuary.com/u/tommie.frazier)\ **Post date:** [April 12, 2023, 4:10pm UTC](https://community.goactuary.com/t/about-run-off-triangle/7681/36 "2023-04-12T16:10:26Z")
Work Comp is forever (until the injured employee dies). Just a guess. ---
**Author:** ![Vorian\_Atreides](https://community.goactuary.com/user_avatar/community.goactuary.com/vorian_atreides/32/65623_2.png) [@Vorian\_Atreides](https://community.goactuary.com/u/Vorian_Atreides)\ **Post date:** [April 12, 2023, 4:10pm UTC](https://community.goactuary.com/t/about-run-off-triangle/7681/37 "2023-04-12T16:10:31Z")
Can’t speak to Maphisto’s situation, but Michigan has had unlimited Personal Injury Protection coverage. So, if someone is involved in an auto accident in MI, their policy would generally be on the hook for the medical bills for its occupants. If one occupant is, say, 12 years old and sustains a serious injury that requires medical care for the rest of their life, that claim remains open until either they die or Jesus comes back and heals them completely. ---
**Author:** ![Mountainhawk](https://community.goactuary.com/user_avatar/community.goactuary.com/mountainhawk/32/82290_2.png) [@Mountainhawk](https://community.goactuary.com/u/Mountainhawk)\ **Post date:** [April 12, 2023, 4:58pm UTC](https://community.goactuary.com/t/about-run-off-triangle/7681/38 "2023-04-12T16:58:51Z")
We just stopped paying on our last WWII era claim a few years ago. ---
**Author:** ![NormalDan](https://community.goactuary.com/user_avatar/community.goactuary.com/normaldan/32/1013_2.png) [@NormalDan](https://community.goactuary.com/u/NormalDan)\ **Post date:** [April 12, 2023, 5:23pm UTC](https://community.goactuary.com/t/about-run-off-triangle/7681/39 "2023-04-12T17:23:02Z")
This tempts me to make one of those chad vs loser guy memes but it’s the supremacy of Property over other lines of business ---
**Author:** ![ArthurItas](https://community.goactuary.com/user_avatar/community.goactuary.com/arthuritas/32/63_2.png) [@ArthurItas](https://community.goactuary.com/u/ArthurItas)\ **Post date:** [April 12, 2023, 6:46pm UTC](https://community.goactuary.com/t/about-run-off-triangle/7681/40 "2023-04-12T18:46:41Z")
Even some property claims can be surprisingly long lived. I know of some WTC and Katrina first party claims that stayed open a really long time. ---
**Author:** ![Vorian\_Atreides](https://community.goactuary.com/user_avatar/community.goactuary.com/vorian_atreides/32/65623_2.png) [@Vorian\_Atreides](https://community.goactuary.com/u/Vorian_Atreides)\ **Post date:** [April 12, 2023, 6:53pm UTC](https://community.goactuary.com/t/about-run-off-triangle/7681/41 "2023-04-12T18:53:28Z")
I would add that those sorts of property claims are “long lived” primarily because the claimant has filed a law suit against the insurer about how the claim was settled. The impact there will be how ALAE will develop more than what the final indemnity payment to the policyholder will be. [Previous page](https://community.goactuary.com/t/about-run-off-triangle/7681.md?page=1) [Next page](https://community.goactuary.com/t/about-run-off-triangle/7681.md?page=3)