Schedule P

Question 1

limitations of assessing reserve adequacy with Schedule P data (6)

Answer 1

• only 10 years of data may not be enough information for long-tailed lines
• loss and DCC are combined and may mask trends in each component
• various allocations are subject to interpretation
• internal pooling or reinsurance arrangements may not be obvious
• data includes business from voluntary and involuntary pools
• commutations will distort reserves

Question 2

Schedule P Part 1

Answer 2

summarizes loss and LAE as of year end on gross and ceded bases; net of sal/sub, net of tabular discount, gross of non-tabular discount until last columns

Question 3

Schedule P Part 2-4

Answer 3

loss and LAE triangles, net of reinsurance and sal/sub, gross of all discounting

• Part 2: (ultimate) incurred
• Part 3: paid
• Part 4: bulk and IBNR

Question 4

Schedule P Part 5

Answer 4

claim count triangles:

• claims closed with payment
• claims outstanding
• claims reported

Question 5

Schedule P Part 6

Answer 5

gross and ceded earned premium triangles

Question 6

how intercompany pooling is treated

Answer 6

• in Schedule P, direct plus assumed and ceded business is reported on a pooled basis
• other schedules and exhibits treat intercompany pooling as a typical reinsurance agreement, essentially double counting