Underwriting profit shouldn't be a major part of the business model. If you're making too much money year to year from that, there's going to be regulatory pressure to lower your filed rates in a given market, and absent that, competitive pressure, because your competitors are going to have similar loss behavior in your segments and will cut rate to take market share from you. Customers see insurance as ~fungible and they will shop, although not as often as they should.

EDIT: I see the OP responded to you, and independently, I'll say he gave a great explanation and probably knows WTF he's doing. Didn't expect to see IBNR explained on HN!