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					            PERSONAL AUTO RESERVING IN A
            CHANGING CLAIMS ENVIRONMENT


                 1998 Casualty Loss Reserve Seminar
                     Philadelphia, Pennsylvania


Moderator: Scott P. Weinstein                Track 2
                                             September 28, 1998
Panelists: Christopher A. Gonwa
    PERSONAL AUTO RESERVING IN A
    CHANGING CLAIMS ENVIRONMENT

                      Overview
   Private Passenger Automobile Results
   Industrywide Loss Development
   Environmental Factors
   Changing Claim Practices
    – Christopher A. Gonwa, Allstate Insurance Company
   Actuarial Impact of Claim Initiatives
   Q&A
   Private Passenger Automobile Results
Net Loss and LAE Ratio - Liability / Medical


                  100.0%
 Net Loss Ratio



                  90.0%

                  80.0%

                  70.0%

                  60.0%

                  50.0%
                           1988

                                  1989

                                         1990

                                                1991

                                                       1992

                                                              1993

                                                                     1994

                                                                            1995

                                                                                   1996

                                                                                          1997
                                                 Accident Year

                                  Loss & LAE           Loss Only
        Private Passenger Automobile Results
Direct Loss and ALAE Ratio - Other PP Auto Liability

                            80.0%
   Direct Incurred Loss &




                            75.0%
         ALAE Ratio




                            70.0%


                            65.0%


                            60.0%
                                    1992   1993   1994    1995    1996   1997
                                                  Calendar Year
        Private Passenger Automobile Results
Direct Loss and ALAE Ratio - Other PP Auto Liability
                 Top 100 Companies

                            140%


                            120%


                            100%
 Direct Loss & ALAE Ratio




                            80%


                            60%


                            40%


                            20%


                             0%                                                All Companies
                                   1992   1993         1994      1995   1996   Average

                                                 Calendar Year
        Private Passenger Automobile Results
Direct Loss and ALAE Ratio - Other PP Auto Liability
                 Top 100 Companies



             2%
            10




             0
            8%
      iet os
       r
     D cLs
      AA R i
           t
     & L E ao

              0
             4%


                                                                      os A
                                                                     Ls &LE A
                                                                      ao x 0 %
                                                                      t
                                                                     Ri ( 1 0 )
                0%
                                                                92
                                                               19           .65
                                                                           05
                                                                            .68
                                                                           08
                                                             93
                                                            19              .71
                                                                           02
                      8 00 0
                     $4, 0                                                  .74
                                                                           05
                                                       94
                                                      19                    .77
                                                                           08
                                                                            .8
                                                                           02
        iet rt n r .
         r   i
             t
        D cWe Pm e                                                          .83
                                                                           05
                                                 95
                                                19      a naY
                                                         l    a
                                                       C edr er             .86
                                                                           08
           (00 )
           $0's                 16 00 0
                               $, 8, 0                                      .99
                                                                           01
                                           96
                                          19                                .92
                                                                           05
                                                                            bv
                                                                           aoe
          Private Passenger Automobile Results
           1 and 2 Year Reserve Development
                         (in $B)

  $0.0
 ($1.0)
 ($2.0)
 ($3.0)
 ($4.0)
 ($5.0)                                  1 Year Rsv Dev
 ($6.0)                                  2 Year Rsv Dev
 ($7.0)
 ($8.0)
 ($9.0)
($10.0)
           1995      1996      1997
Industrywide Loss Development
Private Passenger Automobile Liability
            Incurred Age-to-Age Factors


1.25

1.20

1.15

1.10

1.05

1.00
       88    89   90   91      92   93   94   95   96
                       Accident Year
              12 - 24 Months    24 - 36 Months
Industrywide Loss Development
Private Passenger Automobile Liability
            Paid Age-to-Age Factors


1.90
1.70
1.50
1.30
1.10
0.90
0.70
0.50
       88   89   90   91     92   93   94   95   96
                      Accident Year
            12 - 24 Months    24 - 36 Months
              Environmental Factors
         Private Passenger Auto Liability


 Reductions in annual inflation rates
 Increased use of seat belts
 Increased use of airbags, and other safety
  features
 Decreases in the use of alcohol / DWI
 Increases in average car size
 Proportional reduction in youthful drivers
                  Environmental Factors
             Private Passenger Auto Liability


   Other Issues:
    –   Familiarity with Managed Care
    –   Claims consciousness
    –   Aggressiveness of Plaintiff’s Bar
              Changing Claims Practices
           Private Passenger Auto Liability

   Christopher Gonwa - Allstate Insurance Company

    – Senior Manager - Personal Lines Finance
    – Chartered Property and Casualty Underwriter
    – Nearing completion of Executive MBA at
       Univ. of Illinois - Chicago
    – 11 years of experience in Claims Reserve
      Division.
    – Personal Lines Finance - Claims Support
      (March, 1998)
    Comprehensive Cost Driver Framework



 Pre-accident drivers attributes and vehicle
  characteristics.
 External environment.
 Compensation system.
 Post-accident factors.
           Pre-Accident Cost Drivers

Elements traditionally shown on the policy application:
 driver attributes - age, sex, marital status, driving record.
 vehicle characteristics - make and model, mileage driven,
   multi-car discounts, vehicle use.
 policy age - new versus renewal policy.


These factors are important for predicting the occurrence of a
  physical event.
          Traditional Framework

Pre-Accident Factors
   – Driver Attributes
   – Vehicle             Physical Accident
     Characteristics
   – Garaging Location



                            Insurance
                          Compensation
            External Environment
Characteristics which affect claim frequency and
  claim severity that are beyond immediate
  company control.

   physical qualities - traffic density, road hazards
    and maintenance, and safety regulations.
   economic qualities - prosperity versus recession,
    rates of inflation.
   human qualities - concentration of uninsured
    motorists, demographic shifts.
                 Environmental Factors
               Auto BI Claim Cost Inflation
                       Source: Best’s Review

14.00%

12.00%

10.00%

8.00%
                                                           Inflation
6.00%

4.00%

2.00%

0.00%
         81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96
           Environmental Factors
 Consumer Price Index - Medical Care Inflation
                     Source: Bureau of Labor Statistics

10%
9%
8%
7%
6%
5%                                                                  Inflation
4%
3%
2%
1%
0%
      89   90   91      92    93     94    95    96       97   98
               Environmental Factors
                Seat Belt Use Rates
Source: National Highway Traffic Safety Association


70%
60%
50%
40%
                                              Drivers
30%                                           Passengers
20%
10%
 0%
        1985        1995         1997
          Environmental Factors
  Percentage of Fatalities with BAC > .10

65%
60%
55%
50%                                                All Drivers
                                                   Ages 21-30
45%
40%
35%
      80   82   84   86   88   90   92   94   96
            Environmental Factors
       Percentage of Population Under 25
                 U.S. Census Bureau
50%

40%

30%
                                                    < 25
20%                                                 Years

                                                    14 to 24
10%                                                 Years

0%
      70    80       90          96   2000   2050
                          Year
               Environmental Factors
        Fatality Rate per 100 Million VMT
                           Source: FARS and GES

250%
                                                            Fatality Rate
200%


150%


100%


50%


 0%
       88   89   90   91     92   93   94   95    96   97
           Compensation Systems

   Compensation systems may be grouped into tort
    liability, no-fault, and add-on systems.

   The compensation system has a direct effect on
    claim frequency and claim severity.

   Important in explaining state-by-state differences
    in insurance costs.
                Post-Accident Factors

Relate to whether an injury claim will be brought for the
  accident and the amount of the claim.

   type of injury - soft-tissue vs. fractures vs. more serious
    injuries.
   attorney representation
   type of medical practitioner - physician vs. chiropractor vs.
    physical therapist. Type of treatment.
   claims consciousness
   company initiatives - medical bill review, early contact of
    third party claimants, review of soft-tissue claims, quality
    of claims handling, etc.
           Comprehensive Framework
                            External
     Interactions         Environment            Interactions




                       Physical Accident /
Pre-Accident Factors       Insurance         Post-Accident Factors
                         Compensation




      Interactions                              Interactions
                         Compensation
                           System
                   Changing Claims Practices
                Private Passenger Auto Liability


   Internal Initiatives
    –   Medical and legal cost containment initiatives
    –   Material damage claim handling
    –   Claimant contact programs
    –   Soft-tissue claims handling
    –   Claim staffing requirements
    –   Benchmarking:
         »   Expert Reserving Systems
         »   Adjuster Guidelines
    Actuarial Impact of Changing Claims Practices
           Private Passenger Auto Liability

   Sample Methodologies:
    – Standard Berquist / Sherman analysis.
       » Adjustments made for changes in settlement rate.
       » Adjustments made for trend in average outstanding
         amounts.
       » Consideration of basis for interpolation base
             Closed Claims
             Claims Closed With Amounts
             Claims Closed With Amounts > $
             Actual Claim Closure
       » Shift in type of claims being closed adds
         complexity.
           Wewritem Insurance - Private Passenger Automobile Liability (000's)
                                Paid Loss Development

  Acc                                    Development Month
  Year       12        24        36         48       60       72        84       96
  1988       1,118     2,712     4,000     4,864     5,384    5,650     5,812    5,892
  1989       1,266     2,974     4,281     5,170     5,669    5,960     6,106    6,170
  1990       1,251     2,898     4,217     5,070     5,550    5,812     5,939    6,002
  1991       1,241     2,848     4,064     4,855     5,331    5,568     5,691
  1992       1,248     2,802     4,030     4,860     5,332    5,559
  1993       1,338     3,018     4,329     5,178     5,684
  1994       1,569     3,407     4,780     5,773
  1995       1,626     3,461     4,800
  1996       1,808     3,796
  1997       1,820

                                            Link Ratios
  Acc
  Year       12        24        36        48        60       72        84
  1988       2.427     1.475     1.216     1.107     1.049    1.029     1.014
  1989       2.349     1.439     1.208     1.096     1.051    1.024     1.010
  1990       2.318     1.455     1.202     1.095     1.047    1.022     1.011
  1991       2.295     1.427     1.195     1.098     1.045    1.022
  1992       2.245     1.438     1.206     1.097     1.043
  1993       2.255     1.435     1.196     1.098
  1994       2.171     1.403     1.208
  1995       2.129     1.387
  1996       2.100

Selected     2.132     1.407     1.203     1.098     1.045    1.023     1.012    1.000
DFU          4.282     2.009     1.428     1.187     1.081    1.035     1.012    1.000
       Actuarial Impact of Changing Claims Practices
              Private Passenger Auto Liability

         Wewritem Insurance - Private Passenger Automobile Liability (000's)
                                   Disposal Rate

Acc                                  Development Month
Year       12         24      36        48       60         72        84        96
1988      0.650     0.865    0.940    0.970    0.980       0.990     0.995     1.000
1989      0.650     0.865    0.940    0.970    0.980       0.990     0.995     1.000
1990      0.660     0.865    0.940    0.970    0.980       0.990     0.995     1.000
1991      0.660     0.865    0.940    0.970    0.980       0.990     0.995
1992      0.660     0.865    0.940    0.970    0.980       0.990
1993      0.660     0.865    0.940    0.975    0.985
1994      0.660     0.870    0.950    0.975
1995      0.660     0.870    0.950
1996      0.670     0.880
1997      0.670
           Wewritem Insurance - Private Passenger Automobile Liability (000's)
                Paid Loss Development - Berquist Sherman Adjustment

  Acc                                    Development Month
  Year       12        24        36         48       60       72        84       96
  1988       1,240     2,957     4,283     5,123     5,517    5,650     5,812    5,892
  1989       1,398     3,222     4,572     5,418     5,814    5,960     6,106    6,170
  1990       1,317     3,149     4,496     5,309     5,681    5,812     5,939    6,002
  1991       1,306     3,079     4,323     5,092     5,449    5,568     5,691
  1992       1,311     3,035     4,302     5,095     5,445    5,559
  1993       1,406     3,266     4,566     5,178     5,684
  1994       1,642     3,569     4,780     5,773
  1995       1,699     3,619     4,800
  1996       1,808     3,796
  1997       1,820

                                            Link Ratios
  Acc
  Year       12        24        36        48        60       72        84
  1988       2.384     1.449     1.196     1.077     1.024    1.029     1.014
  1989       2.305     1.419     1.185     1.073     1.025    1.024     1.010
  1990       2.390     1.428     1.181     1.070     1.023    1.022     1.011
  1991       2.357     1.404     1.178     1.070     1.022    1.022
  1992       2.314     1.417     1.184     1.069     1.021
  1993       2.323     1.398     1.134     1.098
  1994       2.173     1.339     1.208
  1995       2.130     1.326
  1996       2.100

Selected     2.133     1.353     1.176     1.079     1.022    1.023     1.012    1.000
DFU          3.872     1.815     1.341     1.141     1.057    1.035     1.012    1.000
    Actuarial Impact of Changing Claims Practices
           Private Passenger Auto Liability

          Wewritem Insurance - Private Passenger Automobile Liability (000's)


 Acc                 Paid               Paid                 B/S
 Year                Loss              Dev. Ult            Dev. Ult
 1988                 5,892              5,892               5,892
 1989                 6,170              6,170               6,170
 1990                 6,002              6,002               6,002
 1991                 5,691              5,757               5,757
 1992                 5,559              5,752               5,752
 1993                 5,684              6,144               6,010
 1994                 5,773              6,850               6,587
 1995                 4,800              6,853               6,438
 1996                 3,796              7,627               6,891
 1997                 1,820              7,794               7,048

 Total               51,187             64,840              62,546

Reserve                                 13,654              11,359
         Wewritem Insurance - Private Passenger Automobile Liability (000's)
 Paid Loss Development - Berquist Sherman Adjustment        TREND RECOGNITION

   Acc                              Development Month
  Year     12       24      36        48        60      72      84      96
  1988     1,240    2,957   4,283     5,123     5,517   5,650   5,812   5,892
  1989     1,398    3,222   4,572     5,418     5,814   5,960   6,106   6,170
  1990     1,317    3,149   4,496     5,309     5,681   5,812   5,939   6,002
  1991     1,306    3,079   4,323     5,092     5,449   5,568   5,691
  1992     1,311    3,035   4,302     5,095     5,445   5,559
  1993     1,406    3,266   4,566     5,178     5,684
  1994     1,642    3,569   4,780     5,773
  1995     1,699    3,619   4,800
  1996     1,808    3,796
  1997     1,820

                                       Link Ratios
   Acc
  Year     12       24      36        48        60      72      84
  1988     2.384    1.449   1.196     1.077     1.024   1.029   1.014
  1989     2.305    1.419   1.185     1.073     1.025   1.024   1.010
  1990     2.390    1.428   1.181     1.070     1.023   1.022   1.011
  1991     2.357    1.404   1.178     1.070     1.022   1.022
  1992     2.314    1.417   1.184     1.069     1.021
  1993     2.323    1.398   1.134     1.098
  1994     2.173    1.339   1.208
  1995     2.130    1.326
  1996     2.100

Selected   2.100    1.326   1.176     1.079     1.022   1.023   1.012   1.000
DFU        3.737    1.779   1.341     1.141     1.057   1.035   1.012   1.000
          Actuarial Impact of Changing Claims Practices
                 Private Passenger Auto Liability

          Wewritem Insurance - Private Passenger Automobile Liability (000's)

                                                                                 Trend
 Acc                 Paid               Paid                 B/S                  B/S
 Year                Loss              Dev. Ult            Dev. Ult             Dev. Ult
 1988                 5,892              5,892               5,892                5,892
 1989                 6,170              6,170               6,170                6,170
 1990                 6,002              6,002               6,002                6,002
 1991                 5,691              5,757               5,757                5,757
 1992                 5,559              5,752               5,752                5,752
 1993                 5,684              6,144               6,010                6,010
 1994                 5,773              6,850               6,587                6,587
 1995                 4,800              6,853               6,438                6,438
 1996                 3,796              7,627               6,891                6,755
 1997                 1,820              7,794               7,048                6,801

 Total               51,187             64,840              62,546               62,163

Reserve                                 13,654              11,359               10,976
    Actuarial Impact of Changing Claims Practices
           Private Passenger Auto Liability

   Loss Development Trend Analysis
    – Define metrics that evaluate the Company’s
      success in achieving various claim initiatives.

    – Develop regression models to distinguish
      between positive influences of claims initiatives
      and other environmental influences.

    – Utilize the regression models to identify
      conditions which would lead to turning-points
      in loss development.
   Changing Claims Practices
Strategic and Operational Model


            Mission

           Key Issues

             Goals

           Objectives


           Processes


            Metrics
         Actuarial Impact of Changing Claims Practices
                Private Passenger Auto Liability
                                             Annual Change in:

Acc    12 - 24 B/S         BI to PD Attorney Contact              Medical Restraint
Year   Dev Factor Change    Ratio Rep. Rate Time                 Inflation  Use

1988     2.384
1989     2.305    -3.32%   -1.17%    0.43%    -0.78%              4.33%     4.30%
1990     2.390     3.72%    3.86%    0.65%    -0.65%             17.13%    -2.00%
1991     2.357    -1.39%   -4.86%    0.71%    -0.45%              -3.54%    5.99%
1992     2.314    -1.81%   -3.90%    0.62%    -0.48%             -15.15%    6.55%
1993     2.323     0.35%    1.25%    0.65%    -0.33%             -19.68%    4.75%
1994     2.173    -6.43%   -7.72%   -0.10%    -0.85%             -19.81%    3.60%
1995     2.130    -1.97%   -2.34%   -0.20%    -0.64%              -5.54%    2.06%
1996     2.100    -1.41%   -0.68%   -0.31%    -0.34%             -22.44%    2.10%
1997
    Loss Development Trend Analysis

Selection Criteria:

   Fit Statistics
    – R-Squared, Adj. R-Squared, Standard Error, etc.
   Reasonability of coefficients
   Multi-collinearity
   Availability of metrics
  Actuarial Impact of Changing Claims Practices
         Private Passenger Auto Liability
Fitted Change in Development Factor =
  Annual Change in:
  BI/PD                  x     0.08797
+ Attorney Rep. Rate     x     2.68400
+ Contact Time           x     8.64900
+ Med. Inflation         x     0.04777
- Restraint Use          x     0.61062
           constant      +     0.05177
           R Squared               0.97976
       Actuarial Impact of Changing Claims Practices
              Private Passenger Auto Liability




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Acc        0.088         2.684         8.649            0.048               -0.611         0.052
Year

1989   -0.103%       1.154%       -6.746%            0.207%            -2.626%          5.177%              -2.937%
1990    0.340%       1.745%       -5.622%            0.818%             1.221%          5.177%               3.679%
1991   -0.428%       1.906%       -3.892%           -0.169%            -3.660%          5.177%              -1.066%
1992   -0.343%       1.664%       -4.152%           -0.724%            -3.998%          5.177%              -2.375%
1993    0.110%       1.745%       -2.854%           -0.940%            -2.900%          5.177%               0.338%
1994   -0.679%      -0.268%       -7.352%           -0.946%            -2.198%          5.177%              -6.267%
1995   -0.206%      -0.537%       -5.535%           -0.265%            -1.257%          5.177%              -2.623%
1996   -0.060%      -0.832%       -2.941%           -1.072%            -1.282%          5.177%              -1.010%
Actuarial Impact of Changing Claims Practices
       Private Passenger Auto Liability

                                            Fitted
Acc    12 - 24 B/S               Fitted     12 - 24
Year   Dev Factor    Change     Change    Dev Factor

1988      2.384                             2.384
1989      2.305      -3.32%     -2.94%      2.314
1990      2.390       3.72%     3.68%       2.399
1991      2.357      -1.39%     -1.07%      2.373
1992      2.314      -1.81%     -2.38%      2.317
1993      2.323       0.35%     0.34%       2.325
1994      2.173      -6.43%     -6.27%      2.179
1995      2.130      -1.97%     -2.62%      2.122
1996      2.100      -1.41%     -1.01%      2.100
1997
           Actuarial Impact of Changing Claims Practices
                  Private Passenger Auto Liability

                                                     Annual Change in:

Acc    12 - 24 B/S            BI to PD   Attorney      Contact            Medical Restraint
Year   Dev Factor    Change    Ratio     Rep. Rate      Time             Inflation  Use

1988     2.384
1989     2.305       -3.32%   -1.17%      0.43%         -0.78%             4.33%    4.30%
1990     2.390       3.72%    3.86%       0.65%         -0.65%           17.13%    -2.00%
1991     2.357       -1.39%   -4.86%      0.71%         -0.45%            -3.54%    5.99%
1992     2.314       -1.81%   -3.90%      0.62%         -0.48%           -15.15%    6.55%
1993     2.323       0.35%    1.25%       0.65%         -0.33%           -19.68%    4.75%
1994     2.173       -6.43%   -7.72%      -0.10%        -0.85%           -19.81%    3.60%
1995     2.130       -1.97%   -2.34%      -0.20%        -0.64%            -5.54%    2.06%
1996     2.100       -1.41%   -0.68%      -0.31%        -0.34%           -22.44%    2.10%

1997                           0.08%      -0.11%        -0.12%           12.47%     1.00%
       Actuarial Impact of Changing Claims Practices
              Private Passenger Auto Liability




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Acc        0.088           2.684         8.649              0.048               -0.611         0.052
Year

1989   -0.103%       1.154%         -6.746%            0.207%              -2.626%          5.177%              -2.937%
1990    0.340%       1.745%         -5.622%            0.818%               1.221%          5.177%               3.679%
1991   -0.428%       1.906%         -3.892%           -0.169%              -3.660%          5.177%              -1.066%
1992   -0.343%       1.664%         -4.152%           -0.724%              -3.998%          5.177%              -2.375%
1993    0.110%       1.745%         -2.854%           -0.940%              -2.900%          5.177%               0.338%
1994   -0.679%      -0.268%         -7.352%           -0.946%              -2.198%          5.177%              -6.267%
1995   -0.206%      -0.537%         -5.535%           -0.265%              -1.257%          5.177%              -2.623%
1996   -0.060%      -0.832%         -2.941%           -1.072%              -1.282%          5.177%              -1.010%

1997   0.007%       -0.295%         -1.038%            0.596%              -0.611%          5.177%               3.836%
        Actuarial Impact of Changing Claims Practices
               Private Passenger Auto Liability

                                       Fitted                          On-Level
Acc    12 - 24 B/S          Fitted     12 - 24               Adjustment 12 - 24
Year   Dev Factor Change   Change    Dev Factor               Factors Dev Factor

1988     2.384                         2.384                   0.854     2.181
1989     2.305    -3.32%   -2.94%      2.314                   0.899     2.173
1990     2.390     3.72%    3.68%      2.399                   0.844     2.174
1991     2.357    -1.39%   -1.07%      2.373                   0.860     2.167
1992     2.314    -1.81%   -2.38%      2.317                   0.897     2.179
1993     2.323     0.35%    0.34%      2.325                   0.892     2.179
1994     2.173    -6.43%   -6.27%      2.179                   1.002     2.175
1995     2.130    -1.97%   -2.62%      2.122                   1.053     2.190
1996     2.100    -1.41%   -1.01%      2.100                   1.073     2.181
1997                        3.84%      2.181                   1.000

                                                  Selected               2.181
           Actuarial Impact of Changing Claims Practices
                  Private Passenger Auto Liability

                                    Link Ratios
   Acc
  Year     12      24      36      48        60      72      84
  1988     2.181   1.334   1.196   1.077     1.024   1.029   1.014
  1989     2.173   1.331   1.185   1.073     1.025   1.024   1.010
  1990     2.174   1.337   1.181   1.070     1.023   1.022   1.011
  1991     2.167   1.324   1.178   1.070     1.022   1.022
  1992     2.179   1.332   1.184   1.069     1.021
  1993     2.179   1.334   1.134   1.098
  1994     2.175   1.338   1.208
  1995     2.190   1.333
  1996     2.181

Selected   2.181   1.334   1.176   1.079     1.022   1.023   1.012   1.000
DFU        3.902   1.789   1.341   1.141     1.057   1.035   1.012   1.000
               Actuarial Impact of Changing Claims Practices
                      Private Passenger Auto Liability

          Wewritem Insurance - Private Passenger Automobile Liability (000's)

                                                                                 Trend     Regression
 Acc                 Paid               Paid                 B/S                  B/S       Adjusted
 Year                Loss              Dev. Ult            Dev. Ult             Dev. Ult    Dev. Ult
 1988                 5,892              5,892               5,892                5,892         5,892
 1989                 6,170              6,170               6,170                6,170         6,170
 1990                 6,002              6,002               6,002                6,002         6,002
 1991                 5,691              5,757               5,757                5,757         5,757
 1992                 5,559              5,752               5,752                5,752         5,752
 1993                 5,684              6,144               6,010                6,010         6,010
 1994                 5,773              6,850               6,587                6,587         6,587
 1995                 4,800              6,853               6,438                6,438         6,438
 1996                 3,796              7,627               6,891                6,755         6,793
 1997                 1,820              7,794               7,048                6,801         7,102

 Total               51,187             64,840              62,546               62,163       62,502

Reserve                                 13,654              11,359               10,976       11,315
    Actuarial Impact of Changing Claims Practices
           Private Passenger Auto Liability


   Loss Development Trend Analysis - Observations:

    – Aids in distinguishing between the effects of
      environmental factors and company initiatives.
    – Helps to quantify the impact of company
      initiatives.
    – Identifies conditions which would lead to
      turning-points in loss development.
    Actuarial Impact of Changing Claims Practices
      Private Passenger Auto Liability - “CPR”


   Be CONVERSANT

   Be PROACTIVE

   Be a RESOURSE

				
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Description: Allstate Car Insurance Claims document sample