The Casualty Actuarial Society has set forth a set of standards which must be observed by C.A.S. licensed actuaries when conducting their studies
Data Organization
Accident
Date: Date that a loss occurred or is deemed by claims personnel to have
occurred; Report Date: Date that a claim is first reported to the
insurer; or Valuation Date: Date through which transactions may be
included in the evaluation of the liability.
Data AvailabilityEnough data must
be made available in a enough detail so that the actuary can properly assess
reserves.
Emergence PatternsThe delay between
the occurrence and recording of the claim
Settlement PatternsThe length of
time that it takes for reported claims to settle
Development PatternsIt is important
for there to be consistency in the settlement and reserving of claims.
Frequency and SeverityA high frequency
of claim occurrences along with a low average claim size make reserve estimates
more reliable.
Reopened Claims PotentialThe inclination
of closed claims to reopen varies significantly from one line of business to
the next and is effected substantially by claims department practices.
Operational ChangesChanges in
computer systems or accounting, claims handling, or underwriting procedures can
have an impact on loss experience.
ReasonablenessThe actuary
should consider the relationship (ratio) between the loss estimate and some
other loss independent measure such as premiums, exposures, or claims counts.
Loss Reserving MethodsAn actuary will
usually look at the results of more than one loss reserving method when
estimating the loss and loss adjustment expense liability for a specific group
of claims.
