Default Case Reserves for Claims

Home Forums Property & Casualty Default Case Reserves for Claims

Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • #5199
    Chris Bellwood
    Participant

    Is anyone aware of any CAS papers/presentations on establishing default case reserve values for claims?  These would be the reserve values that are automatically populated when a claim for a particular coverage is opened.  They would be changed when an adjuster has gathered sufficient information to assign a more-informed value to the claim.

    I’m being asked to establish the default values for all claims opened in the year to come.  This would only involve fixed values per coverage when a case reserve is initially created.  It wouldn’t involve any kind of model to adjust that amount based on individual attributes of the claim – just a fixed amount applicable to all claims with that coverage.

    I can’t recall this topic being covered in exam 5.  I’ve googled a bit, but I can’t seem to find the right key words to bring up anything relevant (if it exists).

    Alternatively, can anyone share what process they use to establish these values at their company?

    Thanks in advance.

    #5276
    Red
    Participant

    Well, I am not aware of any paper on it. But assuming you have a regular primary P&C insurance company for auto and property, you could consider using the severity (loss at 12 month/# of claims) as a default reserve for high freq/low serv lines. Just make sure you trend older loss years to current year level? (Using loss at 12 month is so we can incorporate the most recent years, whatever period you choose, you should make the cut off uniform across all years)

    For liability coverage, and other coverage that has a low freq/high serv lines the claims ppl should be on them from the start and set up an appropriate reserve accordingly?

Viewing 2 posts - 1 through 2 (of 2 total)
  • You must be logged in to reply to this topic.