Commercial Property Terrorism Exposure
In recent years, loss estimation models have become an essential pricing tool for natural catastrophes such as hurricanes and earthquakes. With the tragic events of September 11, 2001, and the continuing worldwide threat of terrorism, the insurance industry is struggling to prepare for these types of extreme events. While no computer model can predict when or where terrorists will strike next, increasingly sophisticated models have been developed to help estimate loss potential deriving from terrorist acts. This session will discuss terrorism modeling and resulting pricing considerations for commercial property, perhaps the most vulnerable line of business. . The discussion will cover the two main attack categories: conventional and nuclear/biological/chemical. The session will also summarize the Federal Backstop Program ( TRIA) and its impact on pricing.
Source:
2005 Ratemaking Seminar
Type:
concurrent
Moderators:
James Christie
Panelists:
David Lalonde
Considerations for Small Business Owners Policies
Polices for small business risks have unique eligibility and underwriting considerations. As the types of business written under business owner's policies increase, these issues become more important. Insurers are examining the fundamentals of underwriting small business risks and moving towards a more efficient approach to underwriting these risks. The concept of scoring finds application in more and more industries and certainly in the property/casualty insurance business. This panel will focus on those fundamentals as well as various approaches modeling the use of credit scores and other available risk characteristics.
Source:
2005 Ratemaking Seminar
Type:
concurrent
Moderators:
James Christie
Panelists:
Robert Walling, A. Phinney
Product Development
This session will focus on some practical examples of challenges in the area of product development from both personal and commercial lines perspectives.
With respect to personal lines, the insurance landscape is littered with examples of carriers who have made enthusiastic entries into new markets (states, lines of business, distribution channels) only to find higher than expected costs and a far longer payback period than initially anticipated. The personal lines portion of this session will focus on lessons learned from successful and unsuccessful entries into new markets and ways to lessen the risks inherent in such forays. Implications for pricing, product design, underwriting, claims, and marketing will be discussed. With respect to commercial lines, the session will focus on a practical example involving major revisions to a business owners policy. This part of the session will "walk through" the steps in the process-from identifying the changes to be made; working with underwriters and product managers to build pricing around new, expanded, and revised coverages; introducing new rating features; working with IT to program and test the changes; to modeling the disruption to insureds around the new product. Considerations surrounding integration of programs of two carriers in a merger situation will also be discussed.
Source:
2005 Ratemaking Seminar
Type:
concurrent
Moderators:
James Christie
Panelists:
Daniel Carr, Dave McLaughry
Emerging and Latent Risks for Commercial Liability
Latent claims activity continues to impact insurers balance sheets. This session will explore several major areas of continuing claim litigation; Construction Defects, and Asbestos and Environmental. With impacts that can extend decades after policies are written, insurers must exercise caution in providing and pricing coverages. Construction Defect claims litigation has continued to develop not only in California, but in other jurisdictions as well affecting a widening circle of classes. Mr. Mack will discuss the background of Construction Defect claims, as well as current trends, developments, and prospects for the future. Ms. Biggs will discuss current developments in Asbestos including historical perspective, impacts on insurers, and current legislative initiatives. She will also touch on the latest developments in Environmental and Silicosis.
Source:
2005 Ratemaking Seminar
Type:
concurrent
Moderators:
James Christie
Panelists:
Jennifer Biggs, Peter Mack
Large Account Issues
The panel will discuss the recent changes to the NCCI's excess loss factor (ELF) methodology, give a brief overview of how insurers and reinsurers use ELFs, and also cover how intermediaries help their clientele design and implement large risk insurance programs that help mitigate the volatility associated with excess workers compensation layers. Basic principles and recent developments related to actual programs, including the trends in the types of plans written, risk appetites of large insureds, and use of alternative market mechanisms will also be discussed.
Source:
2005 Ratemaking Seminar
Type:
concurrent
Moderators:
James Christie
Panelists:
Greg Engl, Brian Ingle, Edward Stone
Workers Compensation-Current Issues
In this overview of the current state of the workers compensation line, panelists will review financial results and recent trends as well as discuss where the WC line might be headed.
Source:
2005 Ratemaking Seminar
Type:
concurrent
Moderators:
James Christie
Panelists:
Nancy Treitel, Barry Lipton
Workers Compensation-Selected State Issues
The panel will present key issues in the states of Louisiana and Florida. An overview of the Louisiana market, including emerging issues such as medical inflation, Second Injury Fund funding, market competitiveness and conditions, as well as the 2005 economic forecast for Louisiana will be discussed. Reinsurance recoverables and other policy issues will also be covered from the perspective of the Louisiana's largest writer. Florida topics to be addressed include statutory reforms, administrative rules and the role of the Florida Division of Workers Compensation.
Source:
2005 Ratemaking Seminar
Type:
concurrent
Moderators:
James Christie
Panelists:
Daniel Sumner, Stephen Cavanaugh
Experience Rating-Current Challenges
The recent performances of the NCCI-Filed Experience Rating Plan and the California Plan (with primary focus on small risks) are the top items for discussion in this session. Session panelists will explore various questions, including how the plans perform for small risks, what the loss experience is for smaller risks, and how average experience rating modifications vary by risk size. The panelist will also discuss how the experience rating eligibility threshold should be determined. Summarized data and statistics will be presented to provide answers and insight into these questions.
Source:
2005 Ratemaking Seminar
Type:
concurrent
Moderators:
Christopher Norman
Panelists:
David Bellusci, Anthony DiDonato
Workers Compensation Data Quality Issues
A panel of experts from workers compensation industry data collection organizations will discuss the importance of data quality, the current state of industry data quality, data quality successes and challenges, and the impact of poor quality on the system. Panelists will also discuss the underlying processes and procedures used by insurers and their trading partners (insureds, TPAs, insurers, regulators, data collection organizations, vendors, etc.) that can negatively or positively affect data quality, industry best practices around the collection and reporting of data, potential improvements, and next steps.
Source:
2005 Ratemaking Seminar
Type:
concurrent
Moderators:
Christopher Norman
Panelists:
Timothy Wisecarver, Arthur Cadorine, Ia Hauck, Bruce Tollefson
Theatrical Skit on Data Management Performed by the Not-Ready-For-Anytime Players
"The Case of the Missing Data" is an amusing look at the dilemma created when an actuary, and those who report to him, acts with an undue lack of diligence to the importance of data. Actuary, I. M Nerdy, finds himself unable to extricate himself from this problem and only after the long arm of law closes around him is he able to see the error of his ways.
Written by:
John A. Stenmark, Vice President and Actuary, Southern Farm Bureau Casualty Insurance Company
The Not-Ready-For-Anytime Players
Joe Friday:
Francois L. Morissette, Principal, Mercer Oliver Wyman, Inc.
Bill Gannon:
Cheng-Sheng P. Wu, Director, Deloitte & Touche LLP
Barbee Buseasabee:
Sara E. Schlenker, Independent Consultant, Sara E. Schlenker
I. M. Nerdy:
Robert F. Wolf, Principal, Mercer Oliver Wyman
Panel Discussion follows: Actuaries depend on data for their work, and they need that data to be accurate. What can be done to ensure (or at least improve) the accuracy of the data used?
Source:
2005 Ratemaking Seminar
Type:
concurrent
Moderators:
Christopher Norman
Panelists:
Gary Knoble, Michael Toothman, Peter Marotta
Introductory Data Management
Session panelists will address basic issues behind data management, including privacy and confidentiality, the actuarial standards for data quality, methods for controlling data, and the need to be concerned about data quality.
Source:
2005 Ratemaking Seminar
Type:
concurrent
Moderators:
Francois Dagneau
Panelists:
Alan Hapke, Nathan Root
Introduction to Profit Provision Calculations
Introduction to Profit Provision Calculations
Source:
2005 Ratemaking Seminar
Type:
concurrent
Moderators:
Francois Dagneau
Panelists:
Ira Robbin
Introduction to Reinsurance Pricing
Session attendees will learn the fundamentals of pricing reinsurance contracts. The session includes an overview of the basic types of reinsurance a pricing actuary will encounter, including quota share, excess of loss, and catastrophe covers. Using practical examples, panelists will discuss the different approaches used in pricing each type of contract, and the data and assumptions required to price these contracts. Also emphasized will be qualitative factors and negotiating strategies that often enter into reinsurance pricing.
Source:
2005 Ratemaking Seminar
Type:
concurrent
Moderators:
John Yonkunas
Panelists:
Nolan Asch
Introduction to Excess, Deductible, ILFs Rating
In addition to general concepts of increased limits ratemaking, session panelists will discuss methods for using loss experience to develop increased limits factors. The session will also provide an overview of excess and deductible pricing.
Source:
2005 Ratemaking Seminar
Type:
concurrent
Moderators:
John Yonkunas
Panelists:
Joseph Palmer
The Indication--Is That Your Final Answer?
Inexperienced actuaries believe that their work is complete once the indication has been developed. However, this is just the first step. The indication is just that-an indication-not the final answer. Actuaries must interpret the indication for its validity as a projection. For example, were there any anomalies in the data that distort the indication? Actuaries must then evaluate the marketplace and competitive position, including impact on customer retention, agent reaction, and potential adverse selection. These evaluations give alternative views of how much of a rate the actuary could take. Finally, the actuary must evaluate means other than base rate changes to affect revenue that can address the induction such as expense modifications and underwriting guidelines. Once an approach is determined, the actuary can also stress test the planned action through scenario modeling and other methods. Session panelists will develop these concepts through various examples and alternative approaches.
Source:
2005 Ratemaking Seminar
Type:
concurrent
Panelists:
Elizabeth DePaolo, Guo Harrison
Introduction to Ratemaking Relativities
Covering the basic foundations of the ratemaking process, this session's topics will include data organization for premium and losses, data adjustments such as current rate level, loss development and trend, and the determination of the expense provision.
(Not intended for those preparing for Exam 5).
Source:
2005 Ratemaking Seminar
Type:
concurrent
Panelists:
Brian Donlan, Theresa Turnacioglu
Basic Techniques for an Overall Indication
Session panelists will address basic issues behind data management, issues of privacy and confidentiality, the actuarial standards concerning data quality, issues concerning how to control the data, and the need to be concerned about data quality.
Source:
2005 Ratemaking Seminar
Type:
concurrent
Moderators:
John Yonkunas
Panelists:
Brandon Emlen
The Underwriting Cycle is Alive, Well and Ready to Kill Your Company: Are Actuaries to Blame?
The underwriting cycle is back with a vengeance and will have no mercy this time around. Pricing, reserving and underwriting blunders will prove far more lethal, far more quickly in today's lethargic investment environment, especially if potential investors flee following the recent spate of insurance industry scandals. Will actuaries share in the blame?
About Robert P. Hartwig
Robert Hartwig, the oft-quoted media spokesperson for the property/casualty insurance industry, is senior vice president and chief economist for the Insurance Information Institute. Hartwig previously served as director of economic research and senior economist with NCCI, as senior economist for Swiss Reinsurance Group, and senior statistician for the United States Consumer Product Safety Commission.
Hartwig received his Ph.D. and Master of Science degrees in economics from the University of Illinois at Urbana-Champaign. He has served as an instructor at the University of Illinois and at Florida Atlantic University. Dr. Hartwig also holds the Chartered Property Casualty Underwriter (CPCU) credential.
Hartwig has written and co-written papers that have appeared in numerous publications, including the Journal of Health Economics, the Proceedings of the Casualty Actuarial Society, the John Liner Review (where he also serves on the editorial board), Dossiers et Etudes (Geneva Association), the Journal of Workers' Compensation, Global Reinsurance, Risk & Insurance, Insurance Day, and Compensation and Benefits Review. He is a regular contributor to National Underwriter and many other industry trade publications.
Hartwig also makes frequent presentations to industry associations, company management, industry executives, analysts and clients and speaks internationally on a wide range of insurance issues. He has testified before numerous regulatory and legislative bodies, including the U.S. Senate Judiciary Committee and the House Financial Services Subcommittee on Capital Markets, Insurance, and Government-Sponsored Enterprises.
Hartwig has been quoted frequently in leading publications such as The Wall Street Journal, New York Times, USA Today, Washington Post, and The Economist. Hartwig also appears regularly on television, including appearances on ABC, CBS, NBC, CNN, CNBC, Fox, PBS, and the BBC.
Source:
2005 Ratemaking Seminar
Type:
general
Moderators:
John Yonkunas
ERM in Energy Sector
What risk management problems are faced by the ever-dynamic energy sector? What issues are topical? What trends are expected? What keeps Energy CROs up at night? This session provides a look at two different perspectives on energy-related models: 1) the evolution of environmental financial products and sustainable development, and new markets to help mitigate energy related exposures, and 2) an update on the issues and concerns of the Committee of Energy CROs.
Source:
2004 Enterprise Risk Management Symposium
Type:
concurrent
Moderators:
Doug Brooks
Panelists:
Michael Walsh, Judy Pokorny, Michael Levin, Patricia Dondanville
ERM in Banking
Banks have made an essential contribution to the developments of best techniques and practices related to enterprise risk management within the financial services industry and beyond. A number of financial and non-financial entities is trying to use the bank's best practices and adopt them to own situations. This session will address some of these techniques and expand on a number of recent ERM developments in banking. A panel of bank risk management and ALM practitioners will discuss the evolution of the current state of the practice and where it is headed. This session will be of interest to any risk management professional who is interested to learn about some of the best practices in ERM.
Source:
2004 Enterprise Risk Management Symposium
Type:
concurrent
Moderators:
Stuart Wason
Panelists:
Robert Mark, Michel Crouhy, Enrico Dallavecchia, Michael Litwin
International Issues in Enterprise Risk Management
A panel of chief risk officers discusses the risks, opportunities, and issues involved in running international operations. The session will address considerations required for understanding the organizational risk profile in an international context and explore how these unique risks are managed in practice. Expert insights, practical experiences, and lessons learned are presented to the audience for reflection, discussion, and questions.
Source:
2004 Enterprise Risk Management Symposium
Type:
concurrent
Moderators:
Jonathan Nye
Panelists:
Wayne Fisher, Joel Aronchick
Risk Management Through Earnings at Risk
ERM practitioners confront a profusion of risk factors as they try to balance risk exposures with unceasing demands for earnings and share performance from their constituents. Practitioners face seemingly perpetual changes in accounting and regulatory regimes and exploding complexity in both asset classes and insurance product design. They wonder if their best efforts align with their firms' business objectives and truly produce measurable value. The Earning-at-Risk concept is a multi-period, multi-factor development of earnings emergence in the accounting domain that can point the way to improved financial performance by permitting insurers to more confidently understand and control financial risk. This session discusses the benefits of an Earnings-at-Risk approach, highlights its key attributes and considers implementation challenges. At the end of the session, attendees will have gained an understanding of Earnings-at-Risk and how it might benefit their individual firms.
Source:
2004 Enterprise Risk Management Symposium
Type:
concurrent
Moderators:
Jonathan Nye
Panelists:
Jay Glacy, Andres Vilms
Risk Management Through Securitization
Life insurers are increasingly looking to securitization to better manage overall risks, improve their return on capital, and to develop permanent solutions to address reinsurance capacity concerns. Some deals have occurred already with a number of others expected to occur in the near future. As companies look for new ways to improve capital efficiency using securitizations, these deals will break new ground in terms of the products covered and the way the arrangements are structured. This session will describe recent developments in the use of securitization.
Source:
2004 Enterprise Risk Management Symposium
Type:
concurrent
Moderators:
Mark Abbott
Panelists:
Morton Lane, Jack Gibson
Measuring and Managing Risk Capital in Practice
This session will provide an inside look at how companies have implemented risk capital frameworks and what benefits they have captured by doing so. Among the issues that to be addressed are (1) difficulties posed by having incomplete, imprecise, or otherwise limited data; (2) the problem of estimating dependencies among various risks; (3) the challenge of establishing a common firm-wide language for conceptualizing risk; (4) ways of gaining the support of senior management, and (5) issues in explaining ERM results to the board as well as to external audiences of investors, regulators, and rating agencies. Practical insights and lessons learned will be explored and discussed. Presentations by panelists will be followed by ample opportunities for questions and discussion by everyone attending.
Source:
2004 Enterprise Risk Management Symposium
Type:
concurrent
Moderators:
Sam Cox
Panelists:
William Panning, Sara Stehlik, Shyam Venkat
Creating a Framework for Risk-Adjusted Performance Measurement
This session will deal with the process and issues for creating an appropriately designed Risk-Adjusted Performance Measurement System ("RAPM"). The speakers will discuss various methodology decisions that might be encountered and how to solve them to create a system to appropriately link risk and return metrics in an insurance organization. Issues such as accounting measurement framework, risk metrics, time horizon, risk tolerance, and hurdle rate development will be discussed. In addition, the panel will address such key items as imbedding the RAPM framework into budgeting, planning, and pricing.
Source:
2004 Enterprise Risk Management Symposium
Type:
concurrent
Moderators:
Leo Tilman
Panelists:
Susan Patschak, Tom Conway, Jean Berliet