This may tell people they should ratchet up their loss severity a little bit in terms of calculating projections and payment timings and things like that on bonds," he said, adding that most industry professionals were expecting loss severities
somewhere in the mid 40's.
Panels B and C report the results for expected severities
of 3 and 5.
In the last few years, indemnity and medical severities
have continued to increase, following a relatively stable period from 1991 to 1995.
on defaulted loans were assumed to be 100%.
Comparing scenarios with different severities
of illness upon admission and different outcomes as measured by mortality had little effect on the relative rank order of the elements.
Low mortgage rates, homebuyer tax credits and government directed loan-modification programs have led to an improvement in home prices and loss severities
since second quarter-2009.
6% of losses last year), though loss severities
rose to 35.
commercial property market fundamentals remain strong and are likely to translate to lower loss severities