U-Haul 2005 Annual Report Download - page 33

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32 I AMERCO ANNUAL REPORT
Management’s Discussion and Analysis
of Financial Condition and Results of Operations
unknown฀ increases฀ in฀ medical฀ and฀ other฀ costs฀ that฀ are฀
likely฀to฀occur฀prior฀to฀the฀ultimate฀settlement.฀The฀second฀
development฀ was฀ the฀ unexpected฀ severity฀ in฀ Republic฀
Western’s฀ commercial฀ transportation฀ and฀ commercial฀
multiple฀peril฀programs.฀Both฀of฀these฀lines฀experienced฀
increased฀claim฀severity฀during฀2003฀that฀had฀a฀negative฀
effect฀ on฀ the฀ 2003฀ actuarial฀ estimations.฀ The฀ increased฀
claim฀severity฀was฀not฀known฀in฀prior฀years฀and฀thus฀was฀
not฀reflected฀in฀previous฀actuarial฀calculations.
The฀following฀table฀illustrates฀the฀change฀in฀unpaid฀loss฀
and฀ loss฀ adjustment฀ expenses.฀ The฀ first฀ line฀ represents฀
reserves฀as฀originally฀reported฀at฀the฀end฀of฀the฀stated฀year.฀
The฀second฀section,฀reading฀down,฀represents฀cumulative฀
amounts฀ paid฀ as฀ of฀ the฀ end฀ of฀ successive฀ years฀ with฀
respect฀to฀that฀reserve.฀The฀third฀section,฀reading฀down,฀
represents฀ revised฀ estimates฀ of฀ the฀ original฀ recorded฀
reserve฀as฀of฀the฀end฀of฀successive฀years.฀The฀last฀section฀
compares฀the฀latest฀revised฀estimated฀reserve฀amount฀to฀
the฀ reserve฀ amount฀ as฀ originally฀ established.฀ This฀ last฀
section฀is฀cumulative฀and฀should฀not฀be฀summed.