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prerequisite to estimating sound loss reserves. This
exploration helps the analyst select appropriate loss
reserving methods and interpret the results. Knowledge
of business, changes in classes of business or
geographical focus may affect the data.

Changes in policy provisions, like policy limits,
deductibles etc impacts development patterns.
Reinsurance purchased by the insurer can impact net
loss development patterns. Changes in reinsurance limits
and attachment points can affect future net development
.All the changes in the external environment too may
impact the data.

The legal and social environment if changes rapidly
becomes a matter of concern. E.g , the introduction of
no fault auto insurance clearly affected the business
environment. Changes inn economic environment like
inflation rate also impacts the database.

Operational changes within the company also affects
the data overtime. E.g installation of new computer

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