Incurred but not Reported Claim Reserves [Discussion]

The determination of adequate reserves for claims incurred but not reported is a problem that is worthy of increased attention and the exposition of the subject by Mr. Tarbell should prove of real value to all who have the task of establishing these reserves. He has set forth the essential nature of the problem and has explained in detail the formulae used by him in computing these reserves. Under this procedure, the incurred but not reported losses of the previous year as developed for a period of eleven months are taken as a base and these amounts are modified by the application of two factors, one to reflect exposure and accident frequency, and the other average claim costs. I believe the method as outlined is thoroughly sound. What I shall have to say will therefore be in the nature of supplemental comment.