Redundant Reserving and Poor Settlement Philosophy in Actuarial Processes

$75,000 average expected leakage per high-severity workers comp claim through excessive indemnity and medical buyout settlements misaligned with probability-weighted medical outcomes and return-to-work scenarios. • $75,000 average leakage per litigated or high-severity claim in property & casualty lines due to systematically excessive reserves anchoring settlement expectations and authorizations, resulting in overpayment even on cases considered negotiation ‘wins’. • $75,000 or more in leakage per large or catastrophic claim, multiplied across long-tail public liabilities and occasionally driving budget overruns and supplemental appropriations.

Email-based reserve reconciliation between primary carrier and reinsurer; Excel pivot tables manually cross-matching reserve vs. paid amounts; phone calls to confirm settlement authority before payment release • Excel reserve templates with hardcoded injury multipliers; email communication between nurse case manager and actuary on reserve adjustments; manual tracking of settlement offers vs. reserves in shared spreadsheets • Excel-based reserve models with manual adjustment tabs, email chains between actuaries and adjusters comparing reserves to settlement outcomes retrospectively