Some companies carry separate reserves, internal vs external (i.e. financial/public/statutory reports). This is not uncommon. See below for an example/explanation relating to SCOR.
SCOR November 6, 2003
SCOR Group results at September 30, 2003
� Profit on 2002-2003 writings in line with the targets set in the "Back on Track" plan, reflecting the Group's improving fundamentals, forging a solid base for future development.
� Operating cash flow multiplied by 3, compared to the same period last year.
� The Group reported a loss of EUR 349 million for the first nine months of the year essentially due to increased reserves on business written in the United States in 1997-2001.
� Ongoing negotiations to commute a large portion of Commercial Risk Partners portfolio.
� Profitable life reinsurance operations to remain within the Group.
� Decision to increase capital by EUR 600 million.
The Board of Directors of SCOR, chaired by Denis Kessler met on November 5, 2003. At the end of the Board meeting, Chairman and Chief Executive Officer Denis Kessler stated:
"The Group's results demonstrate the profitability of 2002-2003 underwriting worldwide. The Back on Track plan is bearing fruit. However, these good results are weighed down by the need for the Group to bolster its reserves in respect of business written in the United States in 1997-2001. As pledged, SCOR now books its reserves based on best estimates each year and has consequently decided to bolster these reserves in the wake of a detailed actuarial review carried out in October 2003.
The Board of Directors has decided to pursue the transformation of its Life reinsurance business to form a subsidiary while retaining 100% control of this subsidiary, which generates satisfactory and recurring profits.
The Board has approved the plan for a EUR 600 million capital increase in order to strengthen the Group's solvency and allow it to pursue its existing underwriting policy, thereby profiting fully from buoyant reinsurance market conditions.
The capital increase with allow SCOR Group to forge ahead with its strategy, which is to be a mid-sized reinsurer with global ambitions, operating selectively in all reinsurance classes, pursuing a profit-driven underwriting policy, providing value-added services, and having opted for a policy of conservative asset management, in order to offer its customers the] level of security they expect it to provide."
The statement is intuitive, in that the actuaries compute their reserve estimates in a range. However, the accountants are required to pick a number within the range as THE estimate for reserves. Typically, companies use the midpoint of the range, but occassionally you find estimates taken from the bottom end of the range. But even if the midpoint is chosen, it beocme easy for one to say that reserves could/should be higher.
As for my opinion, I think CNA's reserves should be even higher than that.