inflateTriangle {ChainLadder}  R Documentation 
Inflate the amounts of a Triangle from the latest diagonal based on an Inflation Rate
inflateTriangle(Triangle, rate)
Triangle 
claim triangle. Assume columns are the development
period, use transpose otherwise.
A (mxn)matrix C_{ik}
which is filled for k ≤q n+1i; i=1,…,m; m≥q n , see

rate 
Inflation rate to be applied to the triangle according to an exponential model 
The sensitivity of projections of ultimate losses based on incurred loss development factors to changes in the adequacy level of case reserves increases significantly for the longtail lines. In particular, if the adequacy of the case reserve is changing, the estimates of ultimate losses based on reported claims could be severely distorted. The function deflates the amounts of latest diagonal to each diagonal of the triangle according to the inflation rate provided, considering an exponential model. The purpose of restating the amounts is to have each diagonal in the triangle at the same level as the latest diagonal (i.e. latest valuation). Ideally the metrics that should be restated are average O/S or average claim paid.
inflateTriangle returns the inflated triangle according to the provided rate
Marco De Virgilis devirgilis.marco@gmail.com
Berquist, J.R. and Sherman, R.E., Loss Reserve Adequacy Testing: A Comprehensive, Systematic Approach, Proceedings of the Casualty Actuarial Society, LXIV, 1977, pp.123184.
See also qpaid
for dealing with nonsquare triangles,
checkTriangleInflation
to check YoY Triangle Inflation Rates,
# Create a Triangle of Average Case O/S avg < MedMal$MedMalOutstanding / MedMal$MedMalOpen # Select a rate of 15% and inflate the average =/S Triangle inflated_tr < inflateTriangle(Triangle = avg, rate = .15) # Multiply it by open claims and add paymnets to calulate the adjusted Reported Claims Trinagle adj_reported < inflated_tr * MedMal$MedMalOpen + MedMal$MedMalPaid # Calculate the IBNR from the unadjusted Triangle std_ibnr < summary(MackChainLadder(MedMal$MedMalReported))$Totals[4, 1] # Calculate the IBNR from the adjusted Triangle adj_reported_ibnr < summary(MackChainLadder(adj_reported))$Totals[4, 1] # Compare the two std_ibnr  adj_reported_ibnr