“Hancock maintained that the property/casualty operation, while it has fallen short in some areas, has made progress in reducing its accident ratio and cutting troublesome casualty lines. The current goal is to further reduce the commercial lines accident year loss ratio, which has been cut by 10 points in recent years, by six an additional points. Hancock said it takes time to improve this business since it has long tails in the U.S.”
If this is true, why did AIG have to increase old reserves by $3.6 billion. If the loss ratio was cut 10 points in recent years by under-reserving losses and $3.6 billion had to be added to loss reserves, then isn’t the 10 point reduction in loss ratio a bunch of BS?
surely the 10% reduction in LR over the recent years only affects the reported year end YoY ratio, i.e. in 2015 it may have been 55% and in 2005 it was 65%. Likely based only what they report at the end of the year in each year and not what it develops into: i.e. in 2010 it was reported at 60% but now 2010 stands at 75%
so to answer the question, yes likely a bunch of BS. But they surely aren’t they only carrier to report a low loss ratio for the current calendar year and then have to adjust down the road due to IBNR.
“Hancock maintained that the property/casualty operation, while it has fallen short in some areas, has made progress in reducing its accident ratio and cutting troublesome casualty lines. The current goal is to further reduce the commercial lines accident year loss ratio, which has been cut by 10 points in recent years, by six an additional points. Hancock said it takes time to improve this business since it has long tails in the U.S.”
If this is true, why did AIG have to increase old reserves by $3.6 billion. If the loss ratio was cut 10 points in recent years by under-reserving losses and $3.6 billion had to be added to loss reserves, then isn’t the 10 point reduction in loss ratio a bunch of BS?
surely the 10% reduction in LR over the recent years only affects the reported year end YoY ratio, i.e. in 2015 it may have been 55% and in 2005 it was 65%. Likely based only what they report at the end of the year in each year and not what it develops into: i.e. in 2010 it was reported at 60% but now 2010 stands at 75%
so to answer the question, yes likely a bunch of BS. But they surely aren’t they only carrier to report a low loss ratio for the current calendar year and then have to adjust down the road due to IBNR.