Bornhuetter-Ferguson closed claim count method
Bornhuetter-Ferguson closed claim count method. This method projects ultimate claim counts in two parts, expected open claims that will close with indemnity payment plus actual closed claims . Open claims that will close with indemnity payment are estimated to be the expected percentage open times initial expected ultimate claim count. The expected percentage unpaid is based on the selected closed claim count development factors to ultimate. Initial expected ultimate claim counts are based upon ultimate indicated claim counts from the reported claim count development method, except that a linear curve is fit to the ultimate claim frequency . This method is best when claim closing patterns tend to be unstable.