Cost/Benefit Analysis of Alternative Investment Strategies Using Dynamic Financial Analysis Tools: A

The focus of the 2000 Call for Papers, as put forth by the Casualty Actuarial Society’s Committee on Dynamic Financial Analysis, is the “evaluation of strategic alternatives and presentations of conclusions.” This paper presents such a study. The paper is laid out in much the same way the analysis was performed, as a journey of discovery, in which one set of conclusions would lead to another set of questions and so on and so forth. The journey is by no means complete. Many more questions are still to be asked and many more conclusions are yet to be drawn. However, one must recognize that most, if not all DFA analyses start by overcoming small hurdles on the way to addressing larger ones. That is what is presented here; a beginning, an analysis on a small scale that has laid the basic framework for more thorough and complex analyses down the road.