The Reporting Wake

Lower reported claim amounts can look like improving experience. If the selected development pattern slows from one valuation to the next, though, more reported-amount development remains at the same age. We examine what changed in the selection and whether first-report counts support a reporting-delay explanation.

The Decision Question

How did the selected reported-amount development pattern change between valuations, and do first-report counts support a reporting-delay explanation?

Default Practice

The familiar view plots the cumulative percentage of ultimate reported amount implied by selected age-to-ultimate factors. Here, each line is the full pattern selected as at a month-end valuation, applied to the same portfolio basis and compared at identical development ages. Reported amount means paid claims plus case outstanding as at the valuation date; percentage developed is the reciprocal of the selected factor to ultimate.

Where the Default Can Improve

These curves show the change in selected timing across valuations, but the widening gap and the ages driving it can be easy to miss. A lower percentage may reflect revised factors or a changed ultimate; the normalised curves alone do not show the amount of either change. Nor can they distinguish later first reports from claim size or case-estimate changes.

Suggested Alternative

Use a Reporting Wake to compare the reported-amount patterns selected as at two valuation dates, including their tails. The shaded gap shows how the selected percentage developed changed at each age. Both curves are selection snapshots, not actual-versus-expected results.

Add bars for the change in the selected first-report count pattern by 15-day band, standardised to 1,000 ultimate claims. The bars are a separate count-based diagnostic for possible notice delay; they do not convert the amount gap into money. This simple illustration gives every claim the same initial reported amount and assumes no later case revisions, so the amount and count patterns align.

What This Reveals and the Risks to Consider

At 60 days of development, the 31 January selection implied 91.2% of ultimate reported amount, compared with 80.5% under the 30 June selection: a 10.7 percentage-point change. Separately, the count selections imply approximately 107 fewer first reports by that age on a common 1,000-claim base. These are changes in assumptions, not observed June outcomes.

The bars locate the first-report intervals behind the count difference. Under the illustrative equal-amount assumption, both measures have a median of 16 days, while the 90% milestone extends from about 57 to 101 days. In real data, amount and count milestones can differ.

If selected ultimate amount is unchanged, a slower amount pattern leaves more future reported-amount development at the same age. That is relevant to the reserve, but it need not all be late first reports: case strengthening on known claims can also contribute. Compare actual amount development and first-report counts with the selections before attributing the change to reporting delay.

The count bars help diagnose timing; they do not measure monetary IBNR or establish its cause.

Decision Boundary

Use this when…	Don’t use this when…
You need to compare selected reported-amount factors across valuations.	You need an actual-versus-expected test.
You want first-report counts to test a delay explanation.	You want to show case strengthening contributes to later development.