Perhaps the 45%, 5%, 50% allocation of calendar year ULAE payments to
Accident Years was too simplistic. Now that this rule has been
discontinued, one has to estimate how much time the Claims Department spends
in opening claims, managing claims and settling claims.
If most of the time is spent on new claims, the indicated reserve would be
lower. The parameters are tough to estimate.
I'd also like to know whether anyone has implemented a Wendy Johnson method
for any Insurers and whether any Regulators have an opinion on the method.
From: Henry John Itri <firstname.lastname@example.org>
To: email@example.com <firstname.lastname@example.org>
Date: Thursday, October 01, 1998 8:27 PM
Subject: ULAE Reserving
>Does anyone have information and/or opinions they can share on the use
>of Wendy Johnson's method for ULAE reserving? Are many (any) companies
>using this method? Other than the original Johnson paper and besides
>Kittel's paper including Bill's review, is there more information on the
>subject of ULAE reserving?
>I am finding that for a particular block of business, use of even the
>most extreme values for parameters of Johnsons's method yields reserves
>that are much lower than reserves produced by the "traditional" calendar
>year, paid to paid method. This is of course not surprising, but I am
>seeking further information to give myself some degree of comfort with
>adopting the method.
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