Case o/s method #2
Hi,
I am not able to rationalize as to why this method #2 might especially work for self-insured entities. I get that missing internal historical paid loss data might render method #1 unreliable, but that can be true even for normal insurers too and not just self insurers.
Thanks
Comments
Yes, a lack of data means method 1 probably can't be used for any entity, but a self-insured entity is much more likely to have this problem because the only data they have is their own. A normal insurance company probably has many insureds and lots of data so it's much less likely for such a company to have to use method 2.