What must be done to historical ultimate loss data to project current expected losses?

To project current expected losses accurately, it is essential to adjust historical ultimate loss data for future claim trends. This process involves analyzing how claims have evolved over time to account for factors such as changes in regulations, economic conditions, inflation, emerging risks, and new loss patterns. By making these adjustments, actuaries can translate past loss experiences into a more relevant projection for current circumstances, ensuring that the expected losses reflect the reality of the current environment. This practice helps maintain the accuracy of predictions and aids in effective decision-making regarding reserves and premiums.

While other options may seem relevant at first glance, they do not serve the primary purpose of projecting current expected losses. Adjusting for future claim trends incorporates the most pertinent aspects of historical data while also considering the influences that could affect future claims.