Company: OXBRW
Filing Date: 2025-03-26
Form Type: 10-K
Source: 0001641172-25-000736
Chunk: 984

Company: OXBRIDGE RE HOLDINGS Ltd
Filing Date: 2025-03-26
Form: 10-K
Item: Item 6
Chunk 984
---
SES AND LOSS ADJUSTMENT EXPENSES (continued) 

Reserving
methodologies and assumptions

Loss
reserves are generally established based on loss payments and case reserves reported by clients when, and if, received. Estimates for
IBNR losses are added to the case reserves. To establish IBNR loss estimates, the Company uses quarterly actuarial estimates from its
independent actuary, who utilizes loss data reported by the Company along with industry loss data and information, knowledge of the business
written and actuary’s own professional judgment.

The
independent actuary employs standard actuarial methods for its analysis each quarter. Such methods may include the:

    ●
    Reported
    Loss Development Method. Ultimate losses are estimated by calculating past reported loss development factors and applying
    them to exposure periods with further expected reported loss development. Since reported losses include payments and case reserves,
    changes in both of these amounts are incorporated in this method.

    ●
    Expected
    Loss Ratio Method. Ultimate losses are estimated by multiplying earned premiums by an expected loss ratio. The expected loss
    ratio is selected using industry data, historical company data and actuarial professional judgment. This method is typically used
    for lines of business and contracts where there are no historical losses or where past loss experience is not credible.

    ●
    Bornhuetter-Ferguson
    Reported Loss Method. Ultimate losses are estimated by modifying expected loss ratios to the extent reported losses experienced
    to date differ from what would have been expected to have been reported based upon the selected reported loss development pattern.
    This method avoids some of the distortions that could result from a large development factor being applied to a small base of reported
    losses to calculate ultimate losses.

    ●
    Frequency
    / Severity Method. Ultimate losses are estimated under this method by multiplying the ultimate number of claims (i.e. the
    frequency multiplied by the exposure base on which the frequency has been determined), by the estimated ultimate average cost per
    claim (i.e. the severity). By analyzing claims experience by its frequency and severity components, the Company can examine trends
    and patterns in the rates of claims emergence (i.e. reporting) and settlement (i.e. closure) as well as in the average cost of claims.

    The
    approach is valuable because sometimes there is more inherent stability in the frequency and severity data when viewed separately
    rather than in the total losses

    F-19

OXBRIDGE
RE