How might the presentation of liabilites at fair value have affected the reported results of US property and casualty insurers?

The Tillinghast business of Towers Perrin was asked by the Casualty Actuarial Society to undertake a research project that analyzed the potential impact on the U.S. property and casualty insurance industry of converting from GAAP to fair value financial reporting. Fair value financial reporting has been an ongoing initiative by both the IASB and FASB. Specifically, we were asked to (i) examine the impact of this accounting change on a “typical” U.S. property and casualty insurer, (ii) identify the practical issues associated with the measurement of property and casualty insurance liabilities on a fair value basis, and (iii) prepare a report that would help all parties to evaluate the extent to which fair value accounting meets its intended objectives of greater transparency, reliability and relevance than is achieved under current U.S. GAAP accounting. The Casualty Actuarial Society provided partial funding for our research.