An Analysis of Auto Liability Loss Reserves and Underwriting Results

This paper examines auto liability loss reserve levels of nine large propertyliability insurers from 1955-1974. These data are compared to previous empirical studies of auto liability reserves. Several statistical tests are used to determine if insurers manage loss reserve levels to smooth underwriting results. Auto liability underwriting returns adjusted for fully developed losses are tested for normality. Finally, a comparison is made between the results of direct writers and those of independent agency insurers.