Reserves Are Uncertainty, Not Guesswork
Explain a reserve change as a controlled response to changed uncertainty rather than a late correction.
Reserve discipline is a control system, not a number-guessing ritual. A reserve sits at the intersection of claim judgment and enterprise reporting. If the rationale is thin, the organization cannot tell whether movement reflects new information, stale review, optimism, or leakage. Changed fact Start with the event that justifies movement. New counsel, surgery, surveillance, liability admission, coverage issue, venue transfer, or a credible demand can all change the exposure picture. Without the changed fact, a reserve note sounds like mood. Exposure mechanism Then explain how the fact changes value. Does it affect probability of payment, severity, defense cost, indemnity range,…
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