Endorsements that are available to add coverage to the Commercial Property policy include the Manufacturers Consequential Loss Assumption
endorsement, CP 99 02, the Utility Services--Direct Damage endorsement, CP 04 17, and the Spoilage Coverage endorsement, CP 04 40.
While the historical data obtained from the property being analyzed is a reasonable basis for a credit loss assumption
, the applicability of historical rates will depend on tenant composition, economic cycles, and management expertise.
Loss coverage provided by the structure is in excess of Fitch's expected net loss assumptions
. Structural features and various triggers also help mitigate dealer default risk and OEM bankruptcy.
Upgrade Loss: Fitch has lowered its upgrade loss assumptions
to 2.5%, 2% and 1.5% at 'AAAsf', 'AAsf' and 'Asf', respectively, reduced from 5%, 4.5% and 4%.
To reflect this, Fitch assigned default multiples 0.25x lower at each rating category, leading to a 4.75x multiple and a 2.4% upgrade loss assumption
The modeling process first uses the estimation and stress of a base case loss assumption
to reflect asset performance in a stressed environment.
Overall, the analyst points out that his data indicates that re-underwriting in the past couple years has turned-around loss trends, with frequency and severity of losses down sharply, and AIG now appears "too conservative" on its newer accident-years loss assumptions
. He rates AIG as his top pick in the P/C segment, and reiterates a Buy rating and $66 price target on the shares.
counterbalanced by the low loss assumptions
under Moody's Advanced LGF
are also expected to improve with regard to the phenomenon known as "leakage," or the payment of flood losses on policies that actually do not cover the peril.
(1997) but updated with the US population count on July 1, 2008 (304.06 million) and the data and loss assumptions
currently used in the hundreds of spreadsheets in the LAFA data series.