Exam 7: Bootstrap output depends on the resampling model
Bootstrapping is a procedure, not a guarantee that all uncertainty has been captured. The resampled units, fitted structure, residual treatment and process simulation determine what the resulting distribution represents.
Worked example or practice scenario
In an original reserving exercise, resampling residuals around a fitted development pattern explores variation under that pattern. If the real process has a changing calendar trend absent from the fit, the bootstrap does not automatically represent that structural change.
Try this next
Write the algorithm in steps: fit, calculate residuals, resample, refit or project, and include the intended process variation. Identify assumptions about dependence and heterogeneity. Explain a separate stress scenario for a limitation outside the resampling model.
Reading sources
ActNet editorial guide · October 1, 2026 · Original illustrative examples.