The X axis refers to projected total losses in year t (PTLt). The Y axis provides values for BLCt and FLCt. BLCt in this figure is constant and equal to 140 because average losses in the past ten years are assumed equal to 10. FLCt is calculated given BLCt = 140 and increases linearly with slope 14 from 0 (when PTL=0) to 140 (when PTLt = 14); then, as PTLt keeps increasing past 14, FLCt keeps increasing linearly but with a slope of only 2.
The X axis refers to projected total losses in year t (PTLt). The Y axis provides values for FLCt, as a function of PTLt as in figure 1, for FLCt assuming that PTLt=30, and for UAt+1 as a function of PTLt and assuming that RTLt = 30. The first FLCt is the same as in Figure 1; when PTLt is assumed equal to 30 and BLCt is 140, FLCt is constant and equal to 172; UAt+1 decreases linearly with slope -20 from being equal to 344 (when PTLt is 0) to 64 (when PTLt is 14), and then decreases linearly with slope -4 from being 64 (when PTLt is 14) to 0 (when PTLt is 30).
The X axis refers to projected total losses in year t (PTLt). The Y axis provides values for FLCt (when loss projection is assumed equal to 30 and BLCt equal to 140) and for UAt+1+FLCt. FLCt (when loss projection is assumed equal to 30 and BLCt equal to 140) is constant and equal to 172. UAt+1 + FLCt decreases linearly with slope -10 from 344 (when PTLt is 0) to 204 (when PTL is 14); then decreases linearly with slope -2 from 204 (when PTLt is 14) to 172 (when PTLt is 30); finally, it increases linearly in PTLt after PTLt = 30 with a slope of 2.