The paper sets out the method required to be followed when estimating reserves for a Company or a Lloyd's Syndicate which has accepted reinsurance treaties that have given rise to catastrophe losses, sufficiently large to upset the normal development pattern and to affect the gross account quite differently from the net account. The losses may be caused by single factors such as aircraft crashes or oil rig disasters, or by the aggregation of claims resulting from a windstorm or an earthquake. The paper discusses two possible approaches to estimation of the gross losses; via exposure totals or via statistical modelling techniques.
