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University of Nebraska - Lincoln

1996

Excess loss

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Methodologies For Determining Reserve Liabilities In The Workers Compensation High Deductible Program, Jerome J. Siewert Jan 1996

Methodologies For Determining Reserve Liabilities In The Workers Compensation High Deductible Program, Jerome J. Siewert

Journal of Actuarial Practice (1993-2006)

In this paper I describe several approaches for estimating liabilities under a high deductible program, including a proposal for a more sophisticated approach relying upon a loss distribution model. The discussion addresses several related issues dealing with deductible size and mix, absence of longterm histories, and the determination of consistent loss development factors among deductible limits. In addition, I propose several approaches for estimating aggregate loss limit charges, if any, and the asset value for associated servicing revenue.