Unallocated Loss Adjustment Reserves in an Inflationary Economic Environment

Unallocated Loss Adjustment Expense seems to have received little attention in the actuarial literature. When the subject is discussed in "actuarial" circles, often, the prevailing attitude is that this item is too small compared with loss reserves or allocated loss adjustment expense reserves to be worth much effort. At best, any estimate can be only as good as loss reserves, and little can be done to improve the simple paid to paid ratio methods.