Question 6

- Learning Outcome 5 (10 marks)

You are a claims manager for REA DAC, a commercial lines insurer. REA DAC has historically taken a conservative approach to claims reserving. However, a recent internal audit has identified the following concerns with its reserving:

REA DAC's flood mapping tool is outdated and, therefore, unreliable.

Inaccuracies in reserving for large claims. Discuss how each of the two issues will impact REA DACs reserving policy

Question:

Discuss how each of the two issues will impact REA DACs reserving policy. (10 marks)