Basic Track II: Comparison of Techniques
Building on Basic Track session I, this session will present basic questions surrounding a reserve estimate: "Is it reasonable?" and "How sensitive is the estimate to alternative assumptions?" Participants will then walk through basic expected loss ratio methods, comparing them with the loss development method. Advantages and disadvantages of methods will be presented. The session will conclude by describing the Annual Statement Schedule P, with terminology and data available from that schedule.
Source:
2010 Casualty Loss Reserve Seminar (CLRS)
Type:
concurrent
Asbestos Reserving Issues - Legacy Exposures, But Always A Current Event
Asbestos exposures have dominated the news in the mass tort arena for several years. Coverage and related issues are not only discussed in actuarial and insurance publications but often find their way into just about all mainstream publications as well. Liability for asbestos has far-reaching effects, impacting insurers and reinsurers alike in the U.S. as well as abroad. The handling of claims not only use considerable claims resources, but involve extensive work by in-house and external legal teams.
Insurance companies face many challenges in estimating liability for asbestos reserves. A.M. Best recently revised their estimate of ultimate asbestos loss exposure upward, yet another reminder that insurers' collective liability is far from being over.
Our panelists will discuss the current state and future of the market with respect to Industry estimates, trends in the types of claims being seen, reserving issues facing insurers and defendants, general techniques that can be used to estimate asbestos reserves, and the limitations associated with these methods in light of the recent (and often not so recent) trends.
Source:
2010 Casualty Loss Reserve Seminar (CLRS)
Type:
concurrent
Moderators:
Kim Holmes
Panelists:
Raji Bhagavatula, Sandra Santomenno, Gerard Altonji
Reserving for Unusual Coverages - Tips for Solving the Puzzle
Actuaries are often faced with the task of estimating reserves in situations where the coverage is unfamiliar. How does one estimate a reasonable reserve when there is little or no historical data, or if it is difficult to identify a similar coverage that might be considered a proxy for the coverage at hand? While there is no foolproof approach to coping with these challenges, this session will provide some considerations that may help guide you to a solution.
Source:
2010 Casualty Loss Reserve Seminar (CLRS)
Type:
concurrent
Moderators:
Kim Holmes
Panelists:
Robin Davis, Charles Lenz
Premium Deficiency Reserves: How Much and Why?
Premium Deficiency Reserves (PDRs), recently the subject of some attention by the NAIC, do not always receive the attention they deserve. All companies are required under SAP and GAAP to determine whether they need a PDR, but the reserve is rarely carried and may not be fully understood - perhaps because it is part of the unearned premium reserve and not subject to an actuarial opinion. This session will first describe the relevant accounting and actuarial guidance and discuss the basic approach to determining whether a PDR is necessary and how much it should be. The second portion of the session will discuss some of the common issues and challenges surrounding the PDR and will emphasize why this reserve may be more important than is commonly recognized, particularly in a soft market.
Source:
2010 Casualty Loss Reserve Seminar (CLRS)
Type:
concurrent
Moderators:
Christine Radau
Panelists:
Kenneth Quintilian
Open Source Loss Simulation Model
The Loss Simulation Model Working Party (LSMWP) , via the Dynamic Risk Modeling Committee, engaged a consulting firm to develop an open source simulation model of the processes of loss emergence and settlement, commonly known as loss development, that underlie the loss "triangles" and other statistics used to estimate unpaid claims. It has created a tool which is programmed in R and VB.NET that researchers could use to test loss reserving methods and models. The panelists will present the new model and the draft of its working party paper. The model and paper will be uploaded to the CAS web site after the CLRS.
Source:
2010 Casualty Loss Reserve Seminar (CLRS)
Type:
concurrent
Moderators:
Christine Radau
Panelists:
Glenn Meyers, Joseph Marker, Hai You
Losses that Impact Multiple Policies: from Pro-Rata to All Sums
When insurance claims span several policies in cases of continuous injury the allocation becomes not only an issue of cost allocation among insurers, but also the policy holder as there are usually both insured retentions and aggregate policy limits. These types of continuous losses include what we traditionally label Environmental and Asbestos but also include Construction Defect and Workers' Compensation claims on progressive injuries.
This session will explain the allocation approach referred to as "All Sums" that is in contrast to the Pro-Rata approach. The session will also discuss an example of a newly defined claim category, Chinese Drywall.
Source:
2010 Casualty Loss Reserve Seminar (CLRS)
Type:
concurrent
Moderators:
Christine Radau
Panelists:
Charles Cook
Intermediate Track I - Considerations in Evaluating Changing Conditions
In an ideal situation, loss reserving would begin with a long, stable history of consistent claim experience with no significant environmental or operational changes affecting the mix of business, claim handling, or terms of coverage. However, that situation is often far from the reality. Changing conditions contribute to volatility and uncertainty in estimates that are mechanically produced. The intermediate track begins with a series of considerations that can help bring understanding of the volatility of initial estimates. These considerations lead us to diagnostic tools for clues. More complete understanding requires communication with other operating units.
Source:
2010 Casualty Loss Reserve Seminar (CLRS)
Type:
concurrent
Health Reform and Health Reserving
Obamacare (PPACA) and other health care market changes will offer significant challenges to health insurance actuaries in terms of both pricing and estimation of liabilities. This session will provide:
* a brief review of legislated reform changes;
* an overview of the nature of health insurance liabilities and considerations in creating estimates; and
* a discussion of anticipated impacts on assumptions and processes as health actuaries deal with reform impacts on liability estimates.
Source:
2010 Casualty Loss Reserve Seminar (CLRS)
Type:
concurrent
Moderators:
Christine Radau
Panelists:
John Lloyd, Roger Schacht
Current Issues and Trends in Medical Malpractice
This session will focus on the most recent trends in the medical malpractice market and the impact such trends would have on reserve and funding studies being prepared by actuaries. Also, the results of recent industry benchmarking analysis will be summarized. Included in this session will be a discussion of the trends in frequency and severity of claims and their effects on loss reserving for all types of medical professional liability.
Source:
2010 Casualty Loss Reserve Seminar (CLRS)
Type:
concurrent
Moderators:
Daniel Greer
Panelists:
William Burns, Christian Coleianne, Kimber Lantry
Basic Track I - Considerations in Evaluating Reserves
Basic understanding begins with the "CAS Statement of Principles Regarding Loss and Loss Adjustment Expense Reserves," including the definitions and considerations that guide the actuary. Following the discussion for the "Statement of Principles," participants will walk through, step-by-step, the most basic of reserving techniques - the loss development method. The presentation will include examples of data organization, link ratios, key assumptions, and potential problems.
Source:
2010 Casualty Loss Reserve Seminar (CLRS)
Type:
concurrent
Economic Capital 201 - Aggregation of Risks and Allocation of Capital
Building on the concept of Economic Capital as presented in the June 2009 webinar "Economic Capital 101 - A Primer on Economic Capital Issues for P.C. Insurers", this session will first review the basic concepts and then focus on some of the challenges in aggregating risks from across the business and allocating diversified capital back to those business units. We will also discuss senior management's uses of economic capital, specifically touching on the role of modeling in the firm's Risk Appetite processes.
Source:
2010 Webinar
Type:
webinar
Keywords:
Economic Capital, Aggregation of Risks and Allocation of Capital
aRm Yourself for the Future - An Introduction to the R Statistical Computing Environment
This session will provide a detailed introduction to the R statistical computing package. R is both an open source language and computing environment with very strong statistical and graphical capabilities. The R project benefits from the active participation of a rapidly expanding global network of users and academics, and is quickly gaining traction within the global actuarial community.
Starting with installation of the software and continuing with an introduction to the R programming language, the session will provide a strong foundation from which attendees will be able to explore R for themselves. The session will first introduce such basic mechanics of the R environment as loading and manipulating data, reading and writing script files, and data exploration. The session will also cover some of the more sophisticated capabilities of R, such as building and graphically analyzing generalized linear models. One or more property-casualty case studies involving real data will be included.
Source:
2010 Webinar
Type:
webinar
Keywords:
statistical, R
Regulatory Round Table
featuring individual presentations by 4 regulators on:
-Principles vs Rules-Based solvency regulation
-International coordination between regulators
-Current issues in each jurisdiction
Source:
2010 Regional Affiliate - CAE
Type:
affiliate
Panelists:
Kris DeFrain, Christopher Lotz
Keywords:
Regulatory
The Securitisation Market and the current Financial Crisis
Source:
2010 Regional Affiliate - CAE
Type:
affiliate
Panelists:
Philippe Jodin
Keywords:
Financial, Securitisation Market
The Limits to Growth: Climate Change and Other Sustainability Issues
Source:
2010 Regional Affiliate - CAE
Type:
affiliate
Panelists:
Oliver Bettis
Keywords:
Climate Change, Sustainability
Economic Shocks: How to Model a Crash
Source:
2010 Regional Affiliate - CAE
Type:
concurrent
Panelists:
Mark Sinclair-McGarvie
Current CAS Issues and Directions
Source:
2010 Regional Affiliate - CAE
Type:
affiliate
Panelists:
Roger Hayne
Professionalism
Source:
2010 Regional Affiliate - CASE
Type:
affiliate
Panelists:
David Powell
Keywords:
Professionalism
Health Care Reform, The Economy, & Property-Casualty Insurance Industry
Source:
2010 Regional Affiliate - CASE
Type:
affiliate
Panelists:
Harry Shuford
Keywords:
Health Care, Property-Casualty Insurance
Issues from Washington, D.C.
With the economic recession and health care reform, there is a lot happening in Washington that will have an impact on the insurance markets in which we work. Our panelists will highlight the most important developments and discuss the potential impacts they may have.
Source:
2010 Regional Affiliate - CAMAR
Type:
affiliate
Keywords:
economic recession, health care
Claim Reserving: Performance Testing and the Control Cycle
Fundamentally, estimates of claim liabilities are forecasts subject to estimation errors. The actuary responsible for making the forecast must select and apply one or more actuarial projection methods, interpret the results, and apply judgment. Performance testing of an actuarial projection method can provide empirical evidence as to the inherent level of estimation error associated with its forecasts. Performance testing of alternative methods provides formal assurance that the actuary is using the best methods for the given circumstance, and also provides insight into the appropriate weight to give to the indications produced by each method. Performance testing is an integral part of the actuarial control cycle associated with the loss reserving process. It provides the necessary feedback loop to the actuary, assuring that he or she is not overconfident about his or her forecasts. In this session, we will describe how to construct sound performance tests, consistent with statistical cross-validation, within the reserving control cycle and illustrate the application of the techniques via a case study, including some interesting empirical results.
Source:
2010 Regional Affiliate - CAMAR
Type:
affiliate
Panelists:
Yi Jing
Keywords:
Claim Reserving
Underwriting Cycles - Are They Unavoidable? - Loss Development Factors Change Through the Cycle
Alternating periods of hard and soft markets have been a notable- and sometimes painful- characteristic of the P & C insurance business. Over the past few years, prices have declined, coverages provided may have increased, and for workers compensation, residual markets have generally depopulated. Will the market turn in 2010 or 2011, especially with investment losses of the recent past reducing capital in the insurance industry and investment returns remaining low?
Our panel of practitioners and observers will explore the environmental, structural, and behavioral factors that give rise to the cycle and will examine the situation as it exists today. They will also tackle the question, "Is the underwriting cycle unavoidable?"
Source:
2010 Regional Affiliate - CAMAR
Type:
affiliate
Moderators:
Daniel Greer
Panelists:
Spencer Gluck, Jeffrey Mango
Keywords:
Underwriting Cycles, Loss Development Factors
Actuarial Standards of Practice - What's New for 2010
The Actuarial Standards Board has proposed changes to ASOP 36 (Statements of Actuarial Opinion Regarding Property/Casualty Loss and Loss Adjustment Expense Reserves) and ASOP 41 (Actuarial Communications). The exposure draft for ASOP 36 is open for comments until June 30 and attendees are encouraged to provide comments based on what they learn during this session. Our speakers will review the proposed changes and the reasons those proposed changes are important to our work.
Source:
2010 Regional Affiliate - CAMAR
Type:
affiliate
Panelists:
Jason Russ, Chet Szczepanski
Keywords:
Actuarial Standards of Practice
The Shoe Yet to Drop: Inflation Risk and the Property/Casualty Industry
The inflationary environment in the U.S. has been relatively benign since the early 1980s. However, many see leading indicators in the economy that raise the specter of increased risk of inflation. This session will discuss the economic background and potential risks. A look back to the inflationary periods of the 1970s and early 1980s will be reviewed, and the implications regarding risk to current property/casualty insurance balance sheets and income statements. Actuarial approaches to deal with inflation risk will be discussed, as well as overall hedges companies can consider if they consider the risk of inflation to be a serious threat.
Source:
2010 Regional Affiliate - CAMAR
Type:
affiliate
Moderators:
Daniel Greer
Panelists:
Thomas Lee, Daniel North
Keywords:
Inflation Risk, Property/Casualty
Business Meeting - Treasurer's Report
Source:
2010 Regional Affiliate - CAMAR
Type:
affiliate