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

This discussion of James Stanard's paper "A Simulation Test of Prediction Errors of Loss Reserve Estimation Techniques" will use his simulation technique to test three loss reserving methods. Two of these methods are discussed in Stanard's paper, and one is relatively new having been presented in the Proceedings last year by Daniel Murphy [6]. The three methods are shown to be special cases of a general weighted average approach. In addition, some of the concepts presented by Standard concerning the expected value of a loss development factor will be analyzed in a little more detail. Please note that the results derived in this discussion are due to the assumptions made within this discussion and may not be applicable to general loss reserving situations.