Empirical Measure of Reserve Level Uncertainty Relative to Discounting and Financial Solvency for a Monoline Medical Professional Liability Insurer [Review]

The topic of this paper is particularly timely given the attention currently being given to discounting by the GAO and IRS. The authors use a monoline medical professional liability insurer to demonstrate the use of investment income to off-set uncertainty in carried loss reserves. While a company such as this has perhaps the largest degree of uncertainty, the ideas ace valid for any type of insurer.