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The Insurance Times

estimate of loss reserve requirements must be supplied
for the balance sheet.

The selection of the final reserve estimate is most
often a subject of the actuary's experience and
judgement. The judges use various practical tests to
arrive at the selected set. It is important to evaluate
the results of each reserving method by attempting to
diagnose the various reasons. The explanation must
be corroborated by the actuary's analysis, experience
and expertise. The attempt to reconcile a number of
different estimates though extremely difficult, usually
yields new insights.

Q11. Why monitoring of results is important?

Ans. Once ultimate losses have been selected, it is extremely
important for the analyst to be able to derive projections
of expected development in the upcoming period. These
predictions can then be monitored over the next period.

If actual loss statistics, such as paid losses, case
reserves, IBNR counts, and the number of claims closed

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