Effects of Loss Reserve Margins in Calendar Year Results [Discussion]

The accuracy of loss reserves is of great importance at the present time and company actuaries are giving more and more attention to the many problems involved in the proper determination of reserves, particularly for liability losses. It seems well to stress that reserves are definitely in the field of actuarial rather than accounting work because, as with ratemaking, we are concerned with analyzing past events so that we may determine from them what is likely to occur in the future. So long as losses are adequately reserved, there is little danger, except as a result of fraud, of the insolvency of an insurance company and the consequent suffering of claimants who are unable to collect under the policies the companies have issued.