Loss Reserves

As the largest item on the liability sheet, reserves must be set with great care. Studies show that weak reserves are the leading cause of insurer insolvency. Companies with a strong and steady reserve strategy can more easily withstand the ups and downs of market cycles.

Our team of actuaries has many years of reserve experience across all lines of insurance, with companies both big and small. We currently serve as the year-end appointed actuarial firm to 25 companies as well as numerous other self-insureds and captives. Most of our year-end clients are regional mutual insurers.

We will also advise you on setting the reserves during the year with a keen eye on the third quarter reserves. We enjoy presenting our report to Boards of Directors as it gives us a chance to interact with those who deal with reserves at the highest level.


Pricing is as much an art as it is a science. Knowing where the industry is in the market cycle is a key element to setting rates. The Streff actuaries can guide your company through different markets with their pricing know-how.

The starting point for a pricing analysis begins with a base rate study. This helps determine the adequacy of the rates at the macro level. Such a study restates the historical premium and losses to the current level in order to overall determine the strength of the rates.

Often it is too blunt to change everyone’s premium by the same percentage. This can be accomplished only when the individual rating factors are in balance. A more effective approach is to change the rating factors and relativities (loyalty, payment method, claim experience) to attract and retain the most profitable insureds.

Self-Insurance and Captive Analysis

The alternative marketplace continues to gain popularity for large accounts with favorable loss experience. Commercial lines are especially suitable to self-insurance and captive formation.

Our proprietary reserve and forecasting models combine your historical experience with industry benchmarks. We also infuse our knowledge of the underlying exposure risks and loss trends

Based on advanced statistical techniques, our models have the flexibility to present the findings at various confidence percentiles, allowing you to choose the operating level that suits your reserving strategy. Graphs and tables help convey our work in a pleasing way. This gives our reports an extra purpose as they become a reference tool for management throughout the year.


Today’s technology has opened up the field of modeling to allow the analyst to test scenarios like never before, making it convenient for companies to operate at any given level of confidence. This gives a extra level of depth to the management process.

A typical modeling project takes a detailed claim file and fits a statistical curve to the losses. This curve can then be used to model a hypothetical future. Blending in other assumptions about growth, expenses and the pricing environment, the modeled future quickly takes shape. Models allow the user to simulate virtually every possible future, and when all the futures are compiled, a shape of the results emerges.

Modeling is useful in testing different reinsurance programs. For example, say a company is interested in increasing its retention limit from $150,000 to $200,000. Models can find the more profitable retention. Or, perhaps a company is considering an aggregate or quota share treaty. Both options can be modeled.

The user can also stress test the surplus, BCAR or RBC ratios to see at which point a high level of premium will impair these measures. In fact, a model is only limited by one’s imagination.