Loss Reserving and Ratemaking in an Inflationary Environment [Review]

Mr. Shatoff has presented a concise and straightforward model depicting the reporting, reserving and settling of claims. In this age of complex econometric models which attempt to account for N-tuples of factors which may or may not significantly influence the observable phenomenon being studied, it is often easy to overlook the power inherent in a simple model to isolate the crucial factors involved. Conversely, it is also true, that in the analysis of a "naive" model, one tends to let one's analysis and thought processes become naive as well.