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Fitch Releases Special Report on Analyzing Prior Period Loss Reserves

Posted on 03 Aug 2009

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In a new report, Fitch Ratings discusses property/casualty insurer loss reserves for older underwriting periods, and challenges in assessing reserve strength for insurers with longer tail claims liabilities.

Reserves from accident years before 1999 represent approximately 14% of industry loss reserves. These liabilities have consistently increased over time and are largely in workers compensation and several liability product segments. In the report, Fitch assesses changes in composition, claims development trends, and loss payment history of prior period reserves using statutory data from 1999-2008.

The report also considers the difficulty in estimating ultimate loss development factors in projecting insurer's reserve adequacy due to data constraints. Fitch's longer term compilation of company and industry aggregate implied tail factors by business segment provides greater perspective in assessing reserve strength in longer tail liabilities.

To access this Special Report, 'Analysis of Prior Period Loss Reserves and Tail Factors' please visit under Insurance > Special Reports.