A Survey of Loss Reserving Methods

Proper loss and loss expense reserves are vital for an insurance company, both for financial security and for the production of accurate income statements. The readings for the loss reserving section of the Casualty Actuarial Society examinations describes dozens of different methods for estimating loss and loss expense reserves. Some of these methods are in common use, others are not used at all. Some are in universal use, since they are extremely simple. Some are explicitly described in every detail, others are merely outlined. Underlying most of these methods are a few basic principles which have been combined in different ways, sometimes with different terminology. Loss Adjustment Expenses/Loss Development/IBNR