Good reserves are hard to define, but we know them when we see them. More insurance insolvencies are traceable to poor reserve practice than any other cause. While we recognize that reserving is more art than science, we also recognize that a reserve mentality must be consistent, and forecast the most probable closed case value.

While reserves are only one of many claim components, there are times when reserves take front and center stage. Those times may include:

• Collateral reviews, where the amount of collateral is based on outstanding reserves, and reserves need to be analyzed as input for making collateral adjustments.
• Retro adjustments, where retro premium is triggered by incurred claims, and reserves need to be reviewed or adjusted in connection with premium adjustments.
• Underwriters need input as to reserve practice and accuracy to make sound judgments in connection with renewal, or pricing issues.
• Actuaries or financial auditors may need input with respect to reserve practice in connection with making financial projections. 

In addition to a review of claim files and loss runs, as part of the audit process, we will be there to advocate for our reserve recommendations on a case-by-case and overall basis.