From Disability Income to Mega-Risks; Policy Event Based Loss Estimation

As new types of losses appear for which traditional "triangular" analysis in inadequate, different approaches must be used. This paper defines policy-event based loss estimation (PEBLE), which is being used primarily in developing natural disaster and toxic tort rates and loss estimates. Although PEBLE appears to be new, its history goes back to life and disability reserving. The paper provides a non-mathematical discussion of the components of PEBLE, its advantages and disadvantages, and some of the issues associated with its use. The paper also examines the compatibility of PEBLE with CAS practices and principles. Keywords: Pollution, Asbestos, Health Hazard, CERCLA, Environmental