A Simulation Test of Prediction Errors of Loss Reserve Estimation Techniques [Discussion]

Mr. Stanard's paper offers the reader three things: 1) reserving techniques; 2) a methodology for assessing reserving techniques; and 3) conclusions about the reserving technique. Of these three, the methodology for assessing reserving techniques is the most significant. This methodology consist of developing a model of the loss emergence process and then simulating this process, applying the various reserving techniques, and keeping score of the results. This methodology is important because it is the most scientific system yet presented for assessing the validity and the accuracy of alternative reserving techniques. It is a general method, as readily applied to other models of the claim emergence process as to the model used in the paper. Discussion of Loss Reserve Techniques