Research On Different Evaluation Methods For Outstanding Lossesreserve Of China’s Insurance For Commercial Vehicles

With China’s insurance industry entered a deepening reform, a comprehensive open of speeding up the new stage of development, the whole insurance industry participate in the economic and social services, bear a heavy social responsibility. China is emerging a big insurance country. Insurance market competition is becoming increasingly fierce, and at the same time, the number of foreign companies’branches is unlimited in China, which requires insurance companies to improve their own competitiveness. The competitiveness is mostly reflected in the investment strategy and ratio and reserve for outstanding losses. Therefore, in order to evaluate the profits, we must take care of such reserves for outstanding losses. In conclusion, considering the scientific method to estimate reserve for outstanding losses has very important practice.Traditional reserves assessment methods, such as the chain ladder method, are currently widely used, although easy to calculate, but in the case of large data anomalies encountered or environmental volatility, it cannot be accurate. This paper is considered to introduce the theory of time series into the actuarial model. In the original Kalman filter model, the equation of state in the state space model will become the ARMA model. In this paper, we select the data of Insurance for a Commercial Vehicle as the actual situation. In evaluation aspect, the chain ladder method and ARMA-Kalman filter model are compared to predict short-tailed business for non-life insurance companies, and to get a result. Meanwhile, the B-F model is taken as a reference to get a conclusion.This paper demonstrates that the Kalman filter model improved the effect is not obvious when the progress of the small number of years, but it is with the progress of the number of years growing. However, in the case of sufficient data, the actuaries, considering as more as possible influences of various factors, select progress factor carefully with the Chain Ladder. The volatility of the model itself will also affect the empirical results.Based on the above findings, we propose as follow:for the insurance industry, it is necessary to strengthen the construction of industry standards, improve the effectiveness of actuarial skills and data, reinforce the theory of advocacy to enhance the awareness of the risk of fluctuations in reserve. At the same time, we must keep up with the international forefront, strengthening the theory with practice.