Monitoring Industry Premium, Loss Ratios, and Loss Reserves

This paper presents a method to use US insurance industry information and economic data to monitor the relative adequacy of the earned premium volume and the calendar year loss ratios that are being booked. The economic data is updated monthly and the industry data being used is updated and available each quarter which allows for timely monitoring of the likely movement in the industry’s loss reserve adequacy.

Keywords: reserving, APLR’s, a priori loss ratios, expected loss ratios, calendar year, accident year.