This does, however, seem to leave a substantial problem with homeowners and
cmp. I expect this to be a major problem for me doing reserve reviews for
small companies who have basically no actuarial information available other
than Schedule P.
Even if I agree that the biggest impact is in the first year or two of
development, that still means I need a method to assess the impact for 2
years. It also means I have to inflate my ALAE factors beyond 2 years due to
the same dollars of development now being related to a deflated base.
In my opinion, this is a major problem caused for the sake of an improvement
in uniformity that has questionable benefit to the majority of insurance
companies.
Greg Grace
Visit the CAS Web Site at http://www.casact.org
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