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Actuarial Risk Consultants LLC
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Reserve Analysis
A
reserve analysis provides a professional opinion regarding the loss reserves
required for unpaid claims incurred as of a specific date.
A reserve analysis is often prepared to meet regulatory or financial
reporting criteria and is usually required by external auditors as part of the
audit process. Often the analysis
is prepared for a self-insured trust, a captive insurance company, a corporation
that uses a loss sensitive vehicle for handling its random hazard risks or as
part of the due diligence process for mergers/acquisitions or divestitures.
Since the loss generation and settlement processes are probabilistic in
nature, confidence bounds are also provided so that the potential variability in
the loss reserve estimates might be demonstrated. A general list of uses of a reserve analysis include the
following: ·
Actuarial
reserve certification ·
Satisfaction
of self-insurance requirements ·
Negotiation
of security and letters of credit requirements ·
Acquisition
due diligence · Evaluation of expected liabilities for financial statements |
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