Loss Reserve Testing: A Report Year Approach, [Discussion]

Fisher and Lange offer a new method of testing the reserve for known claims. Like all reserve tests, the evaluation of the reserve for known claims is important for the purposes of maintaining solvency and correctly stating earnings. Furthermore, it also provides a tool for the management and control of the Claims Department. In fact, for large enough companies, this type of analysis can be applied to individual claims offices. I am particularly happy to see the report year approach used, because I agree with the authors that the report year is the best time grouping for the purpose of testing the reserve for known claims.