Property and Casualty Practice Note December 2007 The actuary may choose to use wording similar to the following: 1.
New company—opinion formed The ABC Insurance Co. commenced operations in 20XX. Certain critical assumptions on which the company relied to estimate reserves were based on external industry data sources. In my opinion, these data are relevant to the operations of the company. However, the uncertainty of projections is increased by the use of these external data.
2.
New company—no opinion formed The ABC Insurance Co. commenced operations in 20XX. Therefore, the company has only been in business for Y years and, as a result, does not, in my opinion, have sufficient historical experience upon which to base a reliable actuarial estimate of the loss and loss adjustment expense reserves as of Dec. 31, 20XX. I am not aware of appropriate external data upon which to base an estimate.
PN07 66