Reinsurance Symposium 2016
|
|
- Kory Thornton
- 5 years ago
- Views:
Transcription
1 Reinsurance Symposium 2016 MAY 10 12, 2016 GEN RE HOME OFFICE, STAMFORD, CT A Berkshire Hathaway Company
2 Reinsurance Symposium 2016 MAY 10 12, 2016 GEN RE HOME OFFICE, STAMFORD, CT Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Presented by Paul Wagner, Marc Dahling and Craig Beardsley Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 2
3 Paul Wagner Treaty Account Executive Los Angeles Introductions Marc Dahling Property Treaty Line of Business Underwriter Stamford Craig Beardsley Treaty Underwriting Manager Stamford Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 3
4 Agenda Day 1 Day 2 1 Prequalification and Strategy 4 Underwriting and Rating Continued 2 Data and Information Request 5 Quote Development 3 Underwriting and Claims Review 6 Proposal and Service Plan 4 Underwriting and Rating 7 Post-Proposal Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 4
5 Quotation Process and Timeline Prequalification and Strategy Underwriting and Claim Reviews Quote Development Post-Proposal Data and Information Request Underwriting and Rating Proposal and Service Plan Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 5
6 Relevance Why this is important? Better understanding of: The proposal process How we use client provided data How we incorporate exposure and experience rating to develop a specific rate for your business Why this is challenging? From the perspective of data usage and rating methods employed, this can be a detailed exercise We will do our best to provide a broad overview of a complex topic Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 6
7 What people think happens Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 7
8 What we hope you take away No to: the Black Box Yes to: Highly collaborative process between the prospect and the Gen Re team Using a variety of rating approaches to present our clients and prospect with the best options Exposure Experience Credibility Underwriting judgment Delivering high quality book management tools to our clients and prospects Accurate data for better pricing Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 8
9 Collaboration How We Work Together Account Manager Business Development Specialist You Account Executive Underwriter Claims Line of Business Specialist Pricing Actuary Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 9
10 Team Roles Account Executive Account Underwriter Needs Prospect / Client Underwriting Resource Communication Liaison between client / prospects and Gen Re Proposal Internal resource coordination Knowledge Market Line of business Timeline management Underwrite for a Profit Monitor results Annual Review Underwriting reviews Review updated qualitative information Rating Referral Training and Development Monitor results Metrics and Compliance Effective rate change Benchmark Line of Business Standards Compliance When to deviate Marketing Needs Book direction Trends Line of business expertise Emerging issues Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 10
11 Quotation Process and Timeline Prequalification and Strategy Underwriting and Claim Reviews Quote Development Post-Proposal Data and Information Request Underwriting and Rating Proposal and Service Plan Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 11
12 1 1. Prequalification and Strategy Getting to know each other Identifying a good match Opportunity to quote Agreement between marketing and underwriting Resource assignment Team strategy and timelines Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 12
13 Quotation Process and Timeline Prequalification and Strategy Underwriting and Claim Reviews Quote Development Post-Proposal Data and Information Request Underwriting and Rating Proposal and Service Plan Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 13
14 2 Data and Information Request Data Request Limits Profiles Class / State Mix Claim Data loss listing, description, policy limits, etc. Usually at least five to 10 full years of loss Prefer ground up Subject Premium History Projection for next year Individual policy level information for Commercial General Liability and Commercial Property Actuarial Reserve Study Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 14
15 Other Uses for the Data In addition to using the data for rating purposes, we also look for opportunities to present book management tools aimed at: Saving money Increasing efficiency Identifying issues Fixing problems Increasing growth Improving net profits Second nature for a direct reinsurer such as Gen Re. Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 15
16 Book Management Objectives Saving Money Data quality Rank exposures Identify outliers Increasing Efficiency Book Metric for Exposure Identification and Targeted Audits Identify Compliance with Your Underwriting Directives Identifying Issues Emerging Exposures Identifying Trends Exposure Changes Jurisdictional Analysis Fixing Problems Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 16
17 Book Management Objectives Increasing Growth Producer targets Pricing guidelines Marketing campaigns Improving Net Profit Identify exposures driving reinsurance needs Modeling to project ceded premiums, losses, and commission for different reinsurance structures Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 17
18 Book Management Tools Featured Tools PEER Property Exposure Review CLEAR Casualty Lines Exposure Analysis Report Underwriting Audits DRA Dynamic Reinsurance Analysis MapPML Accumulation Management Gross Line Tools Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 18
19 Quotation Process and Timeline Prequalification and Strategy Underwriting and Claim Reviews Quote Development Post-Proposal Data and Information Request Underwriting and Rating Proposal and Service Plan Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 19
20 3 Underwriting Review Process Management Discussions Your Strategy, Business, Opportunities and Concerns Goals, objectives, incentives, etc. Operational How your company defines success File Review Your Business How the company underwrites its risks How the company selects business How the company prices How you use metrics to manage Understand the company s underwriting guidelines Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 20
21 3 Claim Review Process To understand how the company handles its claims Philosophy Organizational capabilities Reserving practices Individual claim management Outside Expert Network (Gen Re can help!) Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 21
22 Quotation Process and Timeline Prequalification and Strategy Underwriting and Claim Reviews Quote Development Post-Proposal Data and Information Request Underwriting and Rating Proposal and Service Plan Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 22
23 4 Underwriting and Rating thoughts Oh goodie, now I can find out how my rate is developed! Just tell me what I need to do to get the lowest reinsurance rate possible! How can we make the quote process easier? Do they really use all that data and information they request? How can this help our company? Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 23
24 Risk Disciplined, Consistent Approach to Evaluating Risk and Risk Transfer Point estimate and range Continuity Actuarially-based, model enhanced Science Judgmentally informed and adjusted Art Industry-based defaults and company-specific indications Credibility Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 24
25 Interrelated Disciplines and Processes Pricing and Parameterization Benchmarks Line of Business / Product Development Expertise Transaction / Relationships Clients Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 25
26 Risk Transfer Progression Process Risk Parameter Risk Model Risk Process Risk Inherent variability in random process (variability around the mean) Parameter Risk The actuarial method underlying the estimate do not accurately represent the true characteristics of the risk (incorrect mean) Model Risk Possibility that the model is inappropriate Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 26
27 Process Risk Probability 0 Loss Expected Loss Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 27
28 Parameter Risk Probability 0 Shift in Distribution or Change in Shape Loss Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 28
29 Model Mania Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 29
30 Layers Layers of Risk Catastrophe 1 loss in every years Capacity 1 loss every 5 10 years Exposure 1 2 losses per year Working 5 10 losses per year Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 30
31 Underwriting Curiosity Qualitative Information Business Plan including new initiatives Underwriting guidelines Production sources Delegated underwriting authority and oversight Policy forms, endorsements, applications Operational issues audit, loss control Competitors / peers Market niche We want to get to know you Current reinsurance structure Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 31
32 Underwriting and Pricing Process Checking the data Validation and verification Quality and consistency Formatting the data Underwriter makes pricing selections and sets terms and conditions Referral process with Marketing and Underwriting equally represented Rating parameters to be used Loss adjustment expense treatment Trend selections Data to pricing actuaries for rate study Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 32
33 Rating Overview Direct Loss Ratio Exposure Experience Direct Loss Ratio Estimate Credibility Weighted Excess Ratio Expected Excess Loss Cost Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 33
34 Rating Overview Direct Loss Ratio Exposure Experience Company Data Industry Data Company Exposure Data Parameters, Size of Loss Curves Excess Losses, Direct Losses Parameters Direct Loss Ratio Estimate Expected Excess Loss Cost Industry Loss Distribution with Your Data Credibility Weighted Excess Ratio Company Average Excess Ratio Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 34
35 Company Loss Ratio Based on Annual Statement data Up to 10 years Usually do not re-evaluate Incurred but Not Reported (IBNR) reserve adequacy Exclude modeled cats Package policy allocations HO per ISO data Commercial per annual statement Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 35
36 Industry Loss Ratio Based on industry experience and Gen Re selected parameters Trends (frequency, severity) Industry Experience Annual Statement (excluding modeled catastrophes) Commercial General Liability (ISO based) Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 36
37 Direct Loss Ratio Estimate Company and Industry Loss Ratio Compare Loss Ratios: Company Loss Ratio vs. Industry Loss Ratio in Company s Geographic area Compare company characteristics to industry characteristics Percentage of premium allocated to property on a package policy Commission ratios Size of company Credibility weighted blend indications from two comparisons Relationship of company to industry Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 37
38 Rating Overview Direct Loss Ratio Exposure Experience Company Data Industry Data Company Exposure Data Parameters, Size of Loss Curves Excess Losses, Direct Losses Parameters Direct Loss Ratio Estimate Expected Excess Loss Cost Industry Loss Distribution with Your Data Credibility Weighted Excess Ratio Company Average Excess Ratio Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 38
39 Why Exposure Rating Matters An absence of loss is not an absence of risk Actual short-term loss experience often varies from technical normalized experience Pressure may be enormous to accept good loss experience as a basis for reducing premiums Provides a rate indication based on the characteristics of your business based on a relevant benchmark Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 39
40 What is an Exposure Rate? An estimate of the future vulnerability to loss Expected loss is based on the experience from a large group of similar risks Expected loss is loaded to include overhead and profit to develop a rate The exposure rate should be a stable and accurate measure of the quantitative exposure to loss Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 40
41 When is it Best to Exposure Rate? Besides always High layers with less credibility New layer or product line During market transitions like that ever happens in insurance. Most likely sustainable over time; consistent with smoothing function of reinsurance Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 41
42 What Information is Needed for Exposure Model? Limits profile Expense treatment Policy form Reinsurance contract State and class mix Exposure characteristics (Occupancy, Hazard mix) Premium projections Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 42
43 Exposure Rating Considerations Recognize any changes that you anticipate during the rating period Territory Mix of business within a line Limits profile Differentiate your book from everyone else What makes you unique? This is not based solely on data (underwriting reviews, guidelines, etc.) Other exposures that need to be considered? Unusual losses Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 43
44 Reinsurance Symposium 2016 Property Exposure Rating Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 44
45 Why Exposure Rate? Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 45
46 Property Limits Profile Constructed to match Treaty contract definition of Risk For lines of business to be reinsured Total insured value (all main coverage parts) by Risk Ground-up premium for each Risk Sorted into bands of coverage Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 46
47 What Does a Property Limits Profile Look Like? Total Insured No. of Ground-Up Ground-Up Ground-Up Value Bands Locations Total Insured Value Premium Rate $0 $100,000 3,905 $ 227,671,000 $ 796,849 $0.35 $100,001 $300,000 1,811 $ 367,236,000 $ 1,138,432 $0.31 $300,001 $500,000 1,146 $ 462,583,000 $ 1,248,974 $0.27 $500,001 $1,000, $ 413,792,000 $ 910,342 $0.22 $1,000,001 $2,000, $ 515,477,000 $ 927,859 $0.18 $2,000,001 $5,000, $ 581,421,000 $ 930,274 $0.16 $5,000,001 $10,000, $ 243,264,000 $ 267,590 $0.11 Total 7,997 $ 2,811,444,000 $ 6,220,320 $0.22 Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 47
48 Property Limits Profiles Pitfalls Profiles that are per Policy, not per Risk Overstates exposure for multi-location policies ($9 million excess $1 million layer and 10 separate $1 million Risks) Understates exposure for multiple policies at one location shopping mall, office tower, etc. ($9 million excess $1 million layer with 10 separate $1 million Policies in one building Risk) Homeowners Coverage A only or A, B, C and D? Insurance-to-Value Problems Businessowners Policy Actual loss sustained for time element (business interruption) Top band e.g., $20 million and over Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 48
49 What are the Excess of Loss Tables and Curves? Excess of Loss tables are used to layer losses only There is no load in these tables for expense, risk load or profit Segmentation of data Construction Occupancy Protection Peril Size of risk or (size of limit) Reflects that most property losses are partial losses Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 49
50 What are the Excess of Loss Tables and Curves? Retention as a % of Ins. Value Retained Factor Excess Factor 0% 0.0% 100.0% 5% 43.8% 56.2% 10% 54.2% 45.8% 25% 76.9% 27.9% 50% 89.0% 11.0% 67% 94.6% 5.4% 100% 100.0% 0.0% The tables relate the percentage of retained and excess loss to total loss for different retentions. Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 50
51 What are the Excess of Loss Tables and Curves? With 10% attachment point, average scale allocates 45.8% of loss dollars to the Excess layer and retains 54.2% net. Other curves that account for other risk factors: Occupancy Offices, Apartments 33.9% -26% Warehouses 71.5% +56% Construction Fire Resistive 39.2% -14% Frame 56.7% +24% Protection Sprinklered 33.5% -27% Non-Sprinklered 47.2% +3% Size of Risk Total Insured Value < $100, % +30% Total Insured Value > $5,000, % -70% Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 51
52 Reinsurance Symposium 2016 Casualty Exposure Rating Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 52
53 Why Exposure Rate General Liability and Workers Compensation? Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 53
54 Why Exposure Rate Auto Liability? Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 54
55 General Liability Specific Issues Commercial General Liability Individual policy level data (limits, exposures, class codes, premium, state) Loss costs, Increased limits factors, Loss cost multipliers Businessowners Policy issues Homeowners Limits profiles Coverage forms Exposure guidelines dogs, trampolines, pools, underground storage tanks, etc. Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 55
56 Workers Compensations Specific Issues NCCI class codes Class groupings Exposure Relativity Factors (hazard grades) Company loss ratio States Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 56
57 Automobile-Specific Issues Commercial Auto Fleet breakout (vehicle types) Working on more territorial differentiating within a state Policy limits Personal Auto We usually only experience rate Low limits lead to more experience credibility Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 57
58 Info On Two Different Companies Commercial General Liability Example Both write $10 million in General Liability premium Both write in New England states Both write 70% Premise/Operations and 30% Products/Completed Operations Both write policy limits of $300,000, $500,000 and $1,000,000 Both want to reinsure $750,000 excess $250,000 So they get the same price, right? Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 58
59 Are They Similar Companies? Both write $10 million in General Liability premium One is Businessowners Policy and Commercial Multiperil, the other is all monoline Both write in New England states One is mostly metro, the other rural Both write 70% Premise/Operations and 30% Products/Completed Operations One writes 50% contracting, the other 15% contracting Both write policy limits of $300,000, $500,000 and $1,000,000 One writes 95% at $1 million, the other 50% at $1 million Both want to reinsure $750,000 excess $250,000 One wants Loss Adjustment Expense in the reinsurance limit, the other wants pro-rata Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 59
60 Example Impact of Policy Level Detail Comparison of Rates Average Pricing 4.29% Higher Exposures 7.03% Lower Exposures 1.45% Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 60
61 Five Takeaways Exposure Rating 1. It s your exposure rate 2. Based on your book of business 3. Understanding the exposure excess ratio 4. Data quality makes a difference Book differentiation 5. Best estimate for the future Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 61
62 Rating Overview Direct Loss Ratio Exposure Experience Company Data Industry Data Company Exposure Data Parameters, Size of Loss Curves Excess Losses, Direct Losses Parameters Direct Loss Ratio Estimate Expected Excess Loss Cost Industry Loss Distribution with Your Data Credibility Weighted Excess Ratio Company Average Excess Ratio Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 62
63 Experience Rating From a Typical Investment Prospectus: The performance data shown represent past performance, which is not a guarantee of future results. Investment returns and principal value will fluctuate, so that investors shares, when sold, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data cited. Experience Rating follows the same principles and caveats Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 63
64 Experience Rating Analysis of a Primary Insurer s Historical Loss Experience Restates past losses evaluated at a recent date and then projected under future conditions Assumes that a Primary Insurer s historical experience is predictive of the future Results in an Experience Excess Ratio Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 64
65 Experience Excess Ratio Experience Excess Ratio = Estimated Ultimate Excess Losses (under future conditions) Estimated Ultimate Direct Losses (under future conditions) Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 65
66 Experience Excess Ratio The individual year s indications are then aggregated into various views (three-year, five-year, relevance weighted average, etc.) to determine the most representative observation period to project the future Estimated Ultimate Losses = Actual Case Incurred Losses (Paid + Case reserves + Allocated Loss Adjustment Expense (ALAE), if covered) adjusted for: Loss trend Loss development including Incurred But Not Reported (IBNR) Other factors (changes in book, terms of Treaty, unusual losses) Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 66
67 Experience Example Three Companies (A, B, C) All write similar business All have a reinsurance layer of $450,000 excess $50,000 Each averages $1,500,000 in ceded losses per year to their layer Six-year experience period Do they all deserve the same Experience Excess Ratio? Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 67
68 Experience Example Company A $2,500,000 $2,000,000 Actual Losses $1,500,000 Annual Average $1,000,000 $500,000 $ Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 68
69 Experience Example Company B $2,500,000 $2,000,000 Actual Losses $1,500,000 Annual Average $1,000,000 $500,000 $ Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 69
70 Experience Example Company C $2,500,000 $2,000,000 Actual Losses $1,500,000 Annual Average $1,000,000 $500,000 $ Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 70
71 Loss Trend Allows us to restate prior experience to an expected future cost level Accounts for the impact of inflation over time Social inflation Economic inflation Coverage inflation Two components that impact estimated ultimate losses Severity component average loss per claim Frequency component average number of claims per exposure Each ground-up loss is Severity Trended from the actual accident dates to the average accident date of the proposed Treaty period (e.g., 7/1/2016). Then the losses for each Accident Year are aggregated and Frequency Trended from the actual accident dates to the average accident date of the proposed Treaty period. Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 71
72 Leveraged Impact of Trend For a fixed attachment point, excess reinsurance layers experience a higher Severity Trend than the Ground-Up Trend and fixed Retention Trend. Incurred Loss Ground-Up $450K xs $50K $50K Retention $150,000 $100,000 $50,000 Ground-Up 5% Trend x 1.05 Trended Loss = $157,500 $107,500 $50,000 Annual Severity Trend 5.0% 7.5% 0.0% Summary Severity Trend the Ground-Up loss, then layer it. Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 72
73 Loss Development Trended layered losses (in the aggregate) are developed to their ultimate values using a representative loss development pattern commonly depicted as a loss triangle. Loss development captures the following: Changes to known loss values at future evaluations (case reserve development) Incurred but not reported losses (pure IBNR) The loss triangle should consist of excess reported losses Excess of a similar retention to that being rated Same line of business Ideally, specific to the cedent (versus industry average) Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 73
74 Loss Development Pattern Primary Insurer vs. Reinsurer Loss development is faster (the ultimate value of losses are known sooner) for a primary insurer than it is for a reinsurer. This is due to: The increased time it takes a claim to reach higher attachment points The natural delay in reporting to the reinsurer Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 74
75 Estimated Ultimate Loss Property Example Accident Year 2013 Reported Loss (incl. Allocated Loss Adjustment Expense) Loss Trend Factor (7/1/13 to 7/1/16) (1.10 x 1.10 x 1.10 = 1.331) Trended Loss Layered Loss Actual Loss Loss Trend Factor = $450K xs $50K $ 150,000 $ 199,650 $ 149,650 $ 50,000 $ 66,550 $ 16,550 $ 104,669 $ 139,314 $ 89,314 $ 700,000 $ 931,700 $ 450,000 $ 35,000 $ 46,585 $ 0 $ 250,000 $ 332,750 $ 282,750 $ 350,000 $ 465,850 $ 415,850 $ 45,000 $ 59,895 $ 9,895 Total $2,242,294 $ 1,414,009 Loss Development Factor (36 to Ultimate) 1.02 Estimated Ultimate Loss and Allocated Loss Adjustment Expense $450K excess $50K $ 1,442,289 Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 75
76 Estimated Ultimate Loss Auto Liability Example Accident Year 2013 Reported Loss (incl. ALAE) Loss Trend Factor (7/1/13 to 7/1/16) (1.10 x 1.10 x 1.10 = 1.331) Trended Loss Layered Loss Actual Loss Loss Trend Factor = $450K xs $50K $ 150,000 $ 199,650 $ 149,650 $ 50,000 $ 66,550 $ 16,550 $ 104,669 $ 139,314 $ 89,314 $ 700,000 $ 931,700 $ 450,000 $ 35,000 $ 46,585 $ 0 $ 250,000 $ 332,750 $ 282,750 $ 350,000 $ 465,850 $ 415,850 $ 45,000 $ 59,895 $ 9,895 Total $2,242,294 $ 1,414,009 Loss Development Factor (36 to Ultimate) Estimated Ultimate Loss and Allocated Loss Adjustment Expense $450K excess $50K $ 1,664,289 Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 76
77 Do Loss Trend and Loss Development Overlap? NO Example Four losses, all will settle and close with a value of $500,000 in 2016 dollars, and valued at 7/1/2016 $500,000 $250,000 $50,000 Date of Loss Status Trend Nominal Loss 4/1/07 Closed Development Trend Nominal Loss 4/1/09 Open Development Trend Nominal Loss 4/1/13 Open Trending brings the loss amount at occurrence to current cost level Development brings the trended loss amount to ultimate IBNR?? Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 77
78 Five Experience Rating Takeaways 1. Your track record may be predictive of the future 2. Excess loss to Direct loss concept 3. Comparing your experience excess ratio to exposure excess ratio How appropriate? Why the differential? 4. Up to 10 years of history 5. Data and Parameters (quality, quality, and quality) Client Industry Gen Re Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 78
79 Quotation Process and Timeline Prequalification and Strategy Underwriting and Claim Reviews Quote Development Post-Proposal Data and Information Request Underwriting and Rating Proposal and Service Plan Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 79
80 5 Quote Development Finalizing the Numbers We review Experience and exposure excess loss ratios Credibility weighting of two methodologies We apply Loss Ratio estimate to develop rate Underwriting and Rating Rating is a subset of underwriting Both are linked Underwriting Selection, Understanding and Modifications Client-Specific Better for you and us! Quality data is critical Credibility is a factor We supplement, where needed, with data from other industry sources and Gen Re proprietary analysis Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 80
81 Rating Overview Direct Loss Ratio Exposure Experience Company Data Industry Data Company Exposure Data Parameters, Size of Loss Curves Excess Losses, Direct Losses Parameters Direct Loss Ratio Estimate Expected Excess Loss Cost Industry Loss Distribution with Your Data Credibility Weighted Excess Ratio Company Average Excess Ratio Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 81
82 How Do We Select Excess Ratio? Exposure Experience Experience UW Selected Limit and Retention Excess Ratios Excess Ratios Credibility Excess Ratio 1 st Layer: $250,000 excess $250, % 6.49% High 6.48% 2 nd Layer: $2,500,000 excess $500, % 5.52% Low / Med 4.65% 3 rd Layer: $7,000,000 excess $3,000, % 16.25% Slight 3.85% Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 82
83 How Do We Select Excess Rate? Selected Loss Unloaded Net Limit and Retention Excess Ratios Ratio Rate 1 st Layer: $250,000 excess $250, % 50% 3.24% 2 nd Layer: $2,500,000 excess $500, % 50% 2.33% 3 rd Layer: $7,000,000 excess $3,000, % 50% 1.93% Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 83
84 Quotation Process and Timeline Prequalification and Strategy Underwriting and Claim Reviews Quote Development Post-Proposal Data and Information Request Underwriting and Rating Proposal and Service Plan Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 84
85 6 Proposal and Service Plan Proposal A comprehensive response to your needs Alternatives for your consideration Affirmation of data used to develop the quotation Observations and how our quote responds In most instances, we will provide a full draft contract with actual terms and conditions Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 85
86 6 Proposal and Service Plan Service Plan As a direct reinsurer, the Service Plan is a key component of our product offering It s the workplan for our relationship Review of the prior year s activity (renewal) Establishment of coming year s services Publications Conferences, seminars and training Underwriting and claims reviews Policy form and endorsement reviews Marketing and promotional assistance Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 86
87 6 Proposal and Service Plan Culmination of all of our efforts Truly a Team Effort Prospect / Client Ability to provide quality data Gen Re Marketing and Underwriting Other critical departments Claims, Account Management, Pricing Actuarial Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 87
88 Quotation Process and Timeline Prequalification and Strategy Underwriting and Claim Reviews Quote Development Post-Proposal Data and Information Request Underwriting and Rating Proposal and Service Plan Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 88
89 7 Post-Proposal Resolution of outstanding questions Exploration of proposed options Assistance in analyzing competing proposals Validation of selected parameters Examination of coverage questions Presentation to management or the Board of Directors Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 89
90 What We Covered Yesterday and Today Prequalification and Strategy Data and Information Request Underwriting and Claims Review Underwriting and Rating Quote Development Proposal including Service Plan Post-Proposal Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 90
91 Takeaways Here Are Five Takeaways 1. Customized and tailored for your unique business and operations 2. Properly reflects your specific exposure profile and experience 3. Structured to achieve your objectives 4. Competitively priced with open exchange of how priced 5. A positive experience Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 91
92 Reinsurance Symposium 2016 Questions? Reinsurance Symposium 2016 Developing a Treaty Quotation Treaty Underwriting and Rating Concepts Paul Wagner, Marc Dahling and Craig Beardsley 92
Reinsurance Symposium 2016
Reinsurance Symposium 2016 MAY 10 12, 2016 GEN RE HOME OFFICE, STAMFORD, CT A Berkshire Hathaway Company Reinsurance Symposium 2016 MAY 10 12, 2016 GEN RE HOME OFFICE, STAMFORD, CT What Your Data Can Do
More informationECONOMIC CAPITAL MODELING CARe Seminar JUNE 2016
ECONOMIC CAPITAL MODELING CARe Seminar JUNE 2016 Boston Catherine Eska The Hanover Insurance Group Paul Silberbush Guy Carpenter & Co. Ronald Wilkins - PartnerRe Economic Capital Modeling Safe Harbor Notice
More informationPatrik. I really like the Cape Cod method. The math is simple and you don t have to think too hard.
Opening Thoughts I really like the Cape Cod method. The math is simple and you don t have to think too hard. Outline I. Reinsurance Loss Reserving Problems Problem 1: Claim report lags to reinsurers are
More informationThe Reinsurance Placement Cycle
The Reinsurance Placement Cycle Session 507 Tuesday, June 9, 2015 1:30pm Overview Interactive session among four parties: Insurance Company Reinsurance Company Reinsurance Broker Audience Panel Members
More informationCatastrophe Reinsurance Pricing
Catastrophe Reinsurance Pricing Science, Art or Both? By Joseph Qiu, Ming Li, Qin Wang and Bo Wang Insurers using catastrophe reinsurance, a critical financial management tool with complex pricing, can
More informationThe Role of ERM in Reinsurance Decisions
The Role of ERM in Reinsurance Decisions Abbe S. Bensimon, FCAS, MAAA ERM Symposium Chicago, March 29, 2007 1 Agenda A Different Framework for Reinsurance Decision-Making An ERM Approach for Reinsurance
More informationThe Reinsurance Placement Cycle
Session 507 Tuesday, June 10, 2014 1:45pm 3:15pm IASA 86 TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW Overview This will be an interactive session describing the placement of a reinsurance program
More informationTHE PITFALLS OF EXPOSURE RATING A PRACTITIONERS GUIDE
THE PITFALLS OF EXPOSURE RATING A PRACTITIONERS GUIDE June 2012 GC Analytics London Agenda Some common pitfalls The presentation of exposure data Banded limit profiles vs. banded limit/attachment profiles
More informationHomeowners Ratemaking Revisited
Why Modeling? For lines of business with catastrophe potential, we don t know how much past insurance experience is needed to represent possible future outcomes and how much weight should be assigned to
More informationIASB Educational Session Non-Life Claims Liability
IASB Educational Session Non-Life Claims Liability Presented by the January 19, 2005 Sam Gutterman and Martin White Agenda Background The claims process Components of claims liability and basic approach
More informationGuideline. Earthquake Exposure Sound Practices. I. Purpose and Scope. No: B-9 Date: February 2013
Guideline Subject: No: B-9 Date: February 2013 I. Purpose and Scope Catastrophic losses from exposure to earthquakes may pose a significant threat to the financial wellbeing of many Property & Casualty
More informationP&C Reinsurance Pricing 101 Ohio Chapter IASA. Prepared by Aon Benfield Inpoint Operations
P&C Reinsurance Pricing 101 Ohio Chapter IASA Prepared by Aon Benfield Inpoint Operations Agenda Focus on Treaty, P&C Reinsurance Certain concepts apply to Facultative and/or LYH Reinsurance Pro-Rata Reinsurance
More informationEnterprise Risk Management
Enterprise Risk Management Its implications, benefits and process by Janice Englesbe, CFA, and Abbe Bensimon, FCAS, MAAA, Gen Re Capital Consultants A Berkshire Hathaway Company The 2005 hurricane season
More informationCatastrophe Exposures & Insurance Industry Catastrophe Management Practices. American Academy of Actuaries Catastrophe Management Work Group
Catastrophe Exposures & Insurance Industry Catastrophe Management Practices American Academy of Actuaries Catastrophe Management Work Group Overview Introduction What is a Catastrophe? Insurer Capital
More information2015 Statutory Combined Annual Statement Schedule P Disclosure
2015 Statutory Combined Annual Statement Schedule P Disclosure This disclosure provides supplemental facts and methodologies intended to enhance understanding of Schedule P reserve data. It provides additional
More informationAntitrust Notice 31/05/2016. Evaluating a Commercial Umbrella Rating Plan Using ISO. Table of Contents / Agenda
Antitrust Notice The Casualty Actuarial Society is committed to adhering strictly to the letter and spirit of the antitrust laws. Seminars conducted under the auspices of the CAS are designed solely to
More informationSelective Insurance Group, Inc.
Selective Insurance Group, Inc. KBW Insurance Conference September 10, 2015 Forward Looking Statements Certain statements in this report, including information incorporated by reference, are forward-looking
More informationCAT301 Catastrophe Management in a Time of Financial Crisis. Will Gardner Aon Re Global
CAT301 Catastrophe Management in a Time of Financial Crisis Will Gardner Aon Re Global Agenda CAT101 and CAT201 Revision The Catastrophe Control Cycle Implications of the Financial Crisis CAT101 - An Application
More informationSolutions to the Fall 2013 CAS Exam 5
Solutions to the Fall 2013 CAS Exam 5 (Only those questions on Basic Ratemaking) Revised January 10, 2014 to correct an error in solution 11.a. Revised January 20, 2014 to correct an error in solution
More information9/5/2013. An Approach to Modeling Pharmaceutical Liability. Casualty Loss Reserve Seminar Boston, MA September Overview.
An Approach to Modeling Pharmaceutical Liability Casualty Loss Reserve Seminar Boston, MA September 2013 Overview Introduction Background Model Inputs / Outputs Model Mechanics Q&A Introduction Business
More informationUniversity of California, Los Angeles Bruin Actuarial Society Information Session. Property & Casualty Actuarial Careers
University of California, Los Angeles Bruin Actuarial Society Information Session Property & Casualty Actuarial Careers November 14, 2017 Adam Adam Hirsch, Hirsch, FCAS, FCAS, MAAA MAAA Oliver Wyman Oliver
More informationReinsurance Structures and Pricing Pro-Rata Treaties. Care Reinsurance Boot Camp Josh Fishman, FCAS, MAAA August 12, 2013
Reinsurance Structures and Pricing Pro-Rata Treaties Care Reinsurance Boot Camp Josh Fishman, FCAS, MAAA August 12, 2013 Motivations for Purchasing Reinsurance 1) Limiting Liability [on specific risks]
More informationEVEREST RE GROUP, LTD LOSS DEVELOPMENT TRIANGLES
2017 Loss Development Triangle Cautionary Language This report is for informational purposes only. It is current as of December 31, 2017. Everest Re Group, Ltd. ( Everest, we, us, or the Company ) is under
More informationKINGSTONE COMPANIES, INC.
SECURITIES & EXCHANGE COMMISSION EDGAR FILING KINGSTONE COMPANIES, INC. Form: 10-Q Date Filed: 2014-11-13 Corporate Issuer CIK: 33992 Symbol: KINS SIC Code: 6411 Fiscal Year End: 12/31 Copyright 2014,
More informationSelective Insurance Group, Inc.
Selective Insurance Group, Inc. 2 nd Quarter Investor Presentation Current as of April 30, 2015 Forward Looking Statements Certain statements in this report, including information incorporated by reference,
More informationPractical Considerations for Building a D&O Pricing Model. Presented at Advisen s 2015 Executive Risk Insights Conference
Practical Considerations for Building a D&O Pricing Model Presented at Advisen s 2015 Executive Risk Insights Conference Purpose The intent of this paper is to provide some practical considerations when
More informationRisks. Insurance. Credit Inflation Liquidity Operational Strategic. Market. Risk Controlling Achieving Mastery over Unwanted Surprises
CONTROLLING INSURER TOP RISKS Risk Controlling Achieving Mastery over Unwanted Surprises Risks Insurance Underwriting - Nat Cat Underwriting Property Underwriting - Casualty Reserve Market Equity Interest
More informationTruth About Exposure Curves
May 6-7, 2010 Truth About Exposure Curves CAS Seminar on Reinsurance, 2010 New York City Kevin Hilferty, Guy Carpenter Antitrust Notice The Casualty Actuarial Society is committed to adhering strictly
More informationDRAFT 2011 Exam 5 Basic Ratemaking and Reserving
2011 Exam 5 Basic Ratemaking and Reserving The CAS is providing this advanced copy of the draft syllabus for this exam so that candidates and educators will have a sense of the learning objectives and
More informationBasic Track I CLRS September 2009 Chicago, IL
Basic Track I 2009 CLRS September 2009 Chicago, IL Introduction to Loss 2 Reserving CAS Statement of Principles Definitions Principles Considerations Basic Reserving Techniques Paid Loss Development Method
More informationRisk & Analytics. Trends within Insurance Companies Risk Management. Marc Paasch June Willis Towers Watson. All rights reserved.
Risk & Analytics Trends within Insurance Companies Risk Management Marc Paasch June 2017 2017 Willis Towers Watson. All rights reserved. Key drivers & benefits Outcomes from an analytical approach to own
More informationReinsurance (Passing grade for this exam is 74)
Supplemental Background Material NAIC Examiner Project Course CFE 3 (Passing grade for this exam is 74) Please note that this study guide is a tool for learning the materials you need to effectively study
More informationBoard Finance Committee. November 15, 2017
Board Finance Committee November 15, 2017 Table of Contents 1. FY17 Audited Financials GRP Presentation 2. Workers Compensation - Program Update 3. Travel Report Superintendent/BOT 4. 2018-2019 Budget
More informationQUICK GUIDE. An Introduction to COPE Data. Copyright 2017 AssetWorks Inc. All Rights Reserved. For more information visit,
QUICK GUIDE An Introduction to COPE Data An Introduction to COPE Data The collection of COPE data is important for organizations. It s four data categories construction, occupancy, protection, and exposure
More informationReinsurance Loss Reserving Patrik, G. S. pp
Section Description Reinsurance Loss Reserving 1 Reinsurance Loss Reserving Problems 2 Components of a Reinsurer s Loss Reserve 3 Steps in Reinsurance Loss Reserving Methodology 4 Methods for Short, Medium
More informationCL-3: Catastrophe Modeling for Commercial Lines
CL-3: Catastrophe Modeling for Commercial Lines David Lalonde, FCAS, FCIA, MAAA Casualty Actuarial Society, Ratemaking and Product Management Seminar March 12-13, 2013 Huntington Beach, CA 2013 AIR WORLDWIDE
More informationINTRODUCTION TO EXPERIENCE RATING Reinsurance Boot Camp Dawn Happ, Senior Vice President Willis Re
INTRODUCTION TO EXPERIENCE RATING 2013 Reinsurance Boot Camp Dawn Happ, Senior Vice President Willis Re Agenda Basic experience rating methodology Credibility weighting with exposure rate Diagnostics:
More informationExploring the Fundamental Insurance Equation
Exploring the Fundamental Insurance Equation PATRICK STAPLETON, FCAS PRICING MANAGER ALLSTATE INSURANCE COMPANY PSTAP@ALLSTATE.COM CAS RPM March 2016 CAS Antitrust Notice The Casualty Actuarial Society
More informationLondon Market Pricing Framework
London Market Pricing Framework Hannes van Rensburg, Watson Wyatt Ryan Warren, Watson Wyatt GIRO 2009 - Edinburgh 8 October 2009 1 London Market Pricing Framework What we will cover Pricing framework Overview
More informationSupplemental Background Material. Course CFE 3. Reinsurance. (Passing grade for this exam is 74%)
Supplemental Background Material Course (Passing grade for this exam is 74%) Please note that this study guide is a tool for learning the materials you need to effectively study for this examination. As
More informationThe Real World: Dealing With Parameter Risk. Alice Underwood Senior Vice President, Willis Re March 29, 2007
The Real World: Dealing With Parameter Risk Alice Underwood Senior Vice President, Willis Re March 29, 2007 Agenda 1. What is Parameter Risk? 2. Practical Observations 3. Quantifying Parameter Risk 4.
More informationRisk Transfer Analysis
Risk Transfer Analysis CLRS 2009 Seminar Paul A. Vendetti, FCAS, MAAA Risk Transfer Principle based No bright-line indicator 10/10 Rule ERD at 1.0% It is an accounting decision CEO and CFO attest to the
More informationGI IRR Model Solutions Spring 2015
GI IRR Model Solutions Spring 2015 1. Learning Objectives: 1. The candidate will understand the key considerations for general insurance actuarial analysis. Learning Outcomes: (1l) Adjust historical earned
More informationREQUEST FOR PROPOSAL ACTUARIAL SERVICES RFP #18-001
REQUEST FOR PROPOSAL ACTUARIAL SERVICES RFP #18-001 I. INTRODUCTION The Washington Schools Risk Management Pool (WSRMP) is soliciting proposals from qualified firms to perform actuarial services for a
More informationSCHEDULE P: MEMORIZE ME!!!
SCHEDULE P: MEMORIZE ME!!! NOTE: This skips all the prior years row calculation stuff, since it is covered pretty well by TIA (and I m sure any other manual). What are the cross-checks performed by the
More informationAdvisory Standards I. GOVERNMENT REGULATIONS & GOVERNING DOCUMENTS
Advisory Standards I. GOVERNMENT REGULATIONS & GOVERNING DOCUMENTS The AGRiP Advisory Standards covering Government Regulations and Governing Documents address the legal requirements placed on pool formation
More informationDiscussion of Using Tiers for Insurance Segmentation from Pricing, Underwriting and Product Management Perspectives
2012 CAS Ratemaking and Product Management Seminar, PMGMT-1 Discussion of Using Tiers for Insurance Segmentation from Pricing, Underwriting and Product Management Perspectives Jun Yan, Ph. D., Deloitte
More informationRevised Educational Note. Premium Liabilities. Committee on Property and Casualty Insurance Financial Reporting. March 2015.
Revised Educational Note Premium Liabilities Committee on Property and Casualty Insurance Financial Reporting March 2015 Document 215017 Ce document est disponible en français 2015 Canadian Institute of
More informationKBW Insurance Conference
KBW Insurance Conference Bruce Kelley Chief Executive Officer and President Mark E. Reese Senior Vice President and Chief Financial Officer September 6, 2012 Legal Disclaimer The Private Securities Litigation
More informationState of Florida Office of Insurance Regulation Financial Services Commission
State of Florida Office of Insurance Regulation Actuarial Peer Review and Analysis of the Ratemaking Processes of the National Council on Compensation Insurance, Inc. January 21, 2010 January 21, 2010
More informationInstitute of Actuaries of India
Institute of Actuaries of India Subject ST7 General Insurance: Reserving & Capital Modeling September 2016 Examination INDICATIVE SOLUTION Solution 1: Restrictions on the type of business e.g. Classes
More informationPartnerRe Ltd Loss Development Triangles
2014 Loss Development Triangles Loss Development Triangle Cautionary Language The information in this financial supplement is for informational purposes only and is current only as of its stated date,
More informationBornhuetter Ferguson Initial Expected Loss Ratio Report. September 17 th, 2013 Boston CLRS
Bornhuetter Ferguson Initial Expected Loss Ratio Report September 17 th, 2013 Boston CLRS Antitrust Notice The Casualty Actuarial Society is committed to adhering strictly to the letter and spirit of the
More informationSecond Revision Educational Note. Premium Liabilities. Committee on Property and Casualty Insurance Financial Reporting. July 2016.
Second Revision Educational Note Premium Liabilities Committee on Property and Casualty Insurance Financial Reporting July 2016 Document 216076 Ce document est disponible en français 2016 Canadian Institute
More informationSOCIETY OF ACTUARIES Introduction to Ratemaking & Reserving Exam GIIRR MORNING SESSION. Date: Wednesday, October 30, 2013 Time: 8:30 a.m. 11:45 a.m.
SOCIETY OF ACTUARIES Exam GIIRR MORNING SESSION Date: Wednesday, October 30, 2013 Time: 8:30 a.m. 11:45 a.m. INSTRUCTIONS TO CANDIDATES General Instructions 1. This examination has a total of 100 points.
More informationINSTITUTE OF ACTUARIES OF INDIA
INSTITUTE OF ACTUARIES OF INDIA EXAMINATIONS 24 th March 2017 Subject ST8 General Insurance: Pricing Time allowed: Three Hours (14.45* 18.00 Hours) Total Marks: 100 INSTRUCTIONS TO THE CANDIDATES 1. Please
More informationInvestor Presentation September 2016
Investor Presentation September 2016 SAFE HARBOR STATEMENT This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section
More informationReinsurance Pricing 101 How Reinsurance Costs Are Created November 2014
Reinsurance Pricing 101 How Reinsurance Costs Are Created November 2014 Course Description Reinsurance Pricing 101: How reinsurance costs are created. This session will cover the basics of pricing reinsurance
More informationThe Hanover Insurance Group
The Hanover Insurance Group Bank of America Merrill Lynch 2019 Insurance Conference February 13, 2019 Jack Roche President and Chief Executive Officer 1 Forward-looking statements Forward-looking statements
More informationThe Hanover Insurance Group, Inc.
The Hanover Insurance Group, Inc. Third Quarter 2017 Results November 2, 2017 To be read in conjunction with the press release dated November 1, 2017 and conference call scheduled for November 2, 2017
More informationThe equipment breakdown expertise you need. The flexible relationship you never thought possible.
The equipment breakdown expertise you need. The flexible relationship you never thought possible. Seven key reasons to make Travelers BoilerRE SM part of your growth plans 1. A century of experience For
More informationIntroduction to General Insurance Exam
Exam February 2018 Important Exam Information: Exam Registration Candidates may register online or with an application. Order Study Notes There is no study note package for this examination. Introductory
More informationA Financial Benchmarking Initiative Primer
A Financial Benchmarking Initiative Primer This primer explains financial benchmarks included in AGRiP s Financial Benchmarking Initiative (FBI). Leverage Ratios Measure operating stability and reasonableness
More informationBasic Reserving: Estimating the Liability for Unpaid Claims
Basic Reserving: Estimating the Liability for Unpaid Claims September 15, 2014 Derek Freihaut, FCAS, MAAA John Wade, ACAS, MAAA Pinnacle Actuarial Resources, Inc. Loss Reserve What is a loss reserve? Amount
More informationCVS CAREMARK INDEMNITY LTD. NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2017 AND 2016 (expressed in United States dollars) 1. Operations CVS Carema
NOTES TO THE FINANCIAL STATEMENTS 1. Operations CVS Caremark Indemnity Ltd. ("The Company"), formerly known as Twinsurance Limited, was incorporated in Bermuda on March 27, 1980, and is a wholly owned
More informationSyndicate SCR For 2019 Year of Account Instructions for Submission of the Lloyd s Capital Return and Methodology Document for Capital Setting
Syndicate SCR For 2019 Year of Account Instructions for Submission of the Lloyd s Capital Return and Methodology Document for Capital Setting Guidance Notes August 2018 Contents Introduction 4 Submission
More informationLarge Limits Playbook. Building Successful Partnerships with Large Limit Clients
Large Limits Playbook Building Successful Partnerships with Large Limit Clients Unlocking $2.5 Billion in Capacity As organizations grow, so does their need for quality, uniform insurance coverage limits.
More informationCOMMITTEE ON PROPERTY & CASUALTY INSURANCE FINANCIAL REPORTING EFFECTIVE JANUARY 1, 1994
FINAL PROVISION FOR ADVERSE DEVIATIONS PROPERTY & CASUALTY INSURANCE COMPANIES COMMITTEE ON PROPERTY & CASUALTY INSURANCE FINANCIAL REPORTING FINAL VERSION AS APPROVED BY COUNCIL NOVEMBER 1993 EFFECTIVE
More informationCARe Seminar on Reinsurance - Loss Sensitive Treaty Features. June 6, 2011 Matthew Dobrin, FCAS
CARe Seminar on Reinsurance - Loss Sensitive Treaty Features June 6, 2011 Matthew Dobrin, FCAS 2 Table of Contents Ø Overview of Loss Sensitive Treaty Features Ø Common reinsurance structures for Proportional
More informationMaiden Holdings, Ltd. Investor Presentation May & June 2014
Maiden Holdings, Ltd. Investor Presentation May & June 2014 Forward Looking Statements This presentation contains forward-looking statements which are made pursuant to the safe harbor provisions of the
More informationFBR Fall Capital Markets Investor Conference. December 2, 2009
FBR Fall Capital Markets Investor Conference December 2, 2009 Forward Looking Statements This presentation contains forward-looking statements which are made pursuant to the safe harbor provisions of the
More informationSolvency II: Best Practice in Loss Reserving in Property and Casualty Insurance the foundation is critical
Solvency II: Best Practice NFT in Loss Reserving 1/2007... Solvency II: Best Practice in Loss Reserving in Property and Casualty Insurance the foundation is critical by Heike Klappach Heike Klappach heike.klappach@towersperrin.com
More informationEXECUTIVE SUMMARY OF FINDINGS
2013 FLASPÖHLER SURVEY EXECUTIVE SUMMARY OF FINDINGS Cedants Evaluate Reinsurers (Non-Life / North America) Results from 1186 Cedants CEDANT NON-LIFE 2013 TABLE OF CONTENTS ABOUT THE STUDY 1 RESULTS SEGMENTATION
More informationReinsurance Symposium 2016
Reinsurance Symposium 2016 MAY 10 12, 2016 GEN RE HOME OFFICE, STAMFORD, CT A Berkshire Hathaway Company Reinsurance Symposium 2016 MAY 10 12, 2016 GEN RE HOME OFFICE, STAMFORD, CT An Umbrella Discussion
More informationExcess Reinsurance is a coverage purchased by insurance carriers to limit loss in a year
Excess Medical Reinsurance Treaty Considerations By Daniel Wolak Excess Reinsurance is a coverage purchased by insurance carriers to limit loss in a year from any one claim. This article addresses the
More informationCat Pricing Considerations:
Cat Pricing Considerations: Underwriting Beyond the Black Boxes Sean Devlin CLRS September 16, 2014 and inadequate reinsurance 2 The Market 3 1 The Market Has Historically Been Volatile! "Recent" higher
More information3/10/2014. Exploring the Fundamental Insurance Equation. CAS Antitrust Notice. Fundamental Insurance Equation
Exploring the Fundamental Insurance Equation Eric Schmidt, FCAS Associate Actuary Allstate Insurance Company escap@allstate.com CAS RPM 2014 CAS Antitrust Notice The Casualty Actuarial Society is committed
More informationCalculating a Loss Ratio for Commercial Umbrella. CAS Seminar on Reinsurance June 6-7, 2016 Ya Jia, ACAS, MAAA Munich Reinsurance America, Inc.
Calculating a Loss Ratio for Commercial Umbrella CAS Seminar on Reinsurance June 6-7, 2016 Ya Jia, ACAS, MAAA Munich Reinsurance America, Inc. Antitrust Notice The Casualty Actuarial Society is committed
More informationFundamentals of Actuarial Techniques in General Insurance
Fundamentals of Actuarial Techniques in General Insurance A technical, yet practical, course for non-actuarial practitioners working in any area of insurance and reinsurance. From basic statistical concepts
More informationก ก Tools and Techniques for Enterprise Risk Management (ERM)
ก ก Tools and Techniques for Enterprise Risk Management (ERM) COSO ERM ISO ERM 31 2554 10:45 12:15.. 301, 302, 307 ก ก COSO Internal Control ERM Integrated Framework Application Technique ISO 31000 Guide
More informationYears ended December 31, 2016 and 2015 with Report of Independent Auditors
Harco National Insurance Company and Affiliates Combined Audited Financial Statements - Statutory Basis Years ended December 31, 2016 and 2015 with Report of Independent Auditors Harco National Insurance
More informationMaking the Most of Catastrophe Modeling Output July 9 th, Presenter: Kirk Bitu, FCAS, MAAA, CERA, CCRA
Making the Most of Catastrophe Modeling Output July 9 th, 2012 Presenter: Kirk Bitu, FCAS, MAAA, CERA, CCRA Kirk.bitu@bmsgroup.com 1 Agenda Database Tables Exposure Loss Standard Outputs Probability of
More informationGIIRR Model Solutions Fall 2015
GIIRR Model Solutions Fall 2015 1. Learning Objectives: 1. The candidate will understand the key considerations for general insurance actuarial analysis. Learning Outcomes: (1k) Estimate written, earned
More informationClarify and define the actual versus perceived role and function of rating organizations as they currently exist;
Executive Summary The purpose of this study was to undertake an analysis of the role, function and impact of rating organizations on mutual insurance companies and the industry at large. More specifically,
More informationSELECTIVE INSURANCE GROUP, INC.
PAGE 1 SELECTIVE INSURANCE GROUP, INC. 2019 CREDIT SUISSE FINANCIAL SERVICES FORUM BANK OF AMERICA MERRILL LYNCH 2019 INSURANCE CONFERENCE F E B R U A RY 1 4, 2019 PAGE 2 SAFE HARBOR STATEMENT In this
More informationCAS antitrust notice CAS RPM Seminar Excess Loss Modeling. Page 1
CAS antitrust notice The Casualty Actuarial Society (CAS) is committed to adhering strictly to the letter and spirit of the antitrust laws. Seminars conducted under the auspices of the CAS are designed
More informationGermania Mutual Insurance Company Financial Statements For the year ended December 31, 2010
Germania Mutual Insurance Company Financial Statements For the year ended Contents Auditors' Report 2 Financial Statements Balance Sheet 3 Statement of Operations and Unappropriated Members' Surplus 4
More information2016 Bank of America Merrill Lynch Insurance Conference
2016 Bank of America Merrill Lynch Insurance Conference February 2016 Forward Looking Statements Certain statements in this report, including information incorporated by reference, are forward-looking
More informationNovember 3, Transmitted via to Dear Commissioner Murphy,
Carmel Valley Corporate Center 12235 El Camino Real Suite 150 San Diego, CA 92130 T +1 210 826 2878 towerswatson.com Mr. Joseph G. Murphy Commissioner, Massachusetts Division of Insurance Chair of the
More informationAn Actuarial Evaluation of the Insurance Limits Buying Decision
An Actuarial Evaluation of the Insurance Limits Buying Decision Joe Wieligman Client Executive VP Hylant Travis J. Grulkowski Principal & Consulting Actuary Milliman, Inc. WWW.CHICAGOLANDRISKFORUM.ORG
More informationCatastrophe Portfolio Management
Catastrophe Portfolio Management CARE Seminar 2011 Mindy Spry 2 1 Contents 1 Utilize Model Output for Risk Selection 2 Portfolio Management and Optimization 3 Portfolio Rate Comparison 3 Contents 1 Utilize
More informationBasic Reinsurance Concepts
Basic Reinsurance Concepts OVERVIEW What is Reinsurance Insurance/Reinsurance Similarities Parties to the Reinsurance Agreement Why Insurers Buy Reinsurance Types of Reinsurance Agreements How Reinsurance
More informationClaims Analysis From a Financial Perspective
Certified Public Accountants Accounting, Auditing, Consulting and Tax Claims Analysis From a Financial Perspective Presented by Herb McDuffee Marianne Stuart CPA James Marta CPA, ARPM Why is this important?
More informationMedical Stop Loss Carriers Evaluation & Selection
Medical Stop Loss Carriers Evaluation & Selection Phillip C. Giles, CEBS Vice President, Sales & Marketing QBE North America Introduction The basic premise of any alternative risk transfer (ART) program
More informationRISK MANAGEMENT 5 SAMPO GROUP'S STEERING MODEL 7 SAMPO GROUP S OPERATIONS, RISKS AND EARNINGS LOGIC
Risk Management RISK MANAGEMENT 5 SAMPO GROUP'S STEERING MODEL 7 SAMPO GROUP S OPERATIONS, RISKS AND EARNINGS LOGIC 13 RISK MANAGEMENT PROCESS IN SAMPO GROUP COMPANIES 15 Risk Governance 20 Balance between
More informationSelective Insurance Group, Inc.
Selective Insurance Group, Inc. 2 nd Quarter Investor Presentation Current as of May 27, 2014 Certain statements in this report, including information incorporated by reference, are forward-looking statements
More informationFebruary 11, Review of Alberta Automobile Insurance Experience. as of June 30, 2004
February 11, 2005 Review of Alberta Automobile Insurance Experience as of June 30, 2004 Contents 1. Introduction and Executive Summary...1 Data and Reliances...2 Limitations...3 2. Summary of Findings...4
More informationStrategies for Controlling your Cost of Risk
Strategies for Controlling your Cost of Risk 1 controlling cost of risk is a learning process 2 which direction will you go to control your cost of risk 3 understanding your industry is crucial to creating
More informationCreating value through reinsurance
Creating value through reinsurance Strategy cycle 2018-2020 Ulrich Wallin, Chief Executive Officer 20th International Investors' Day Frankfurt, 19 October 2017 HR improved market position to No. 4 in P&C
More informationNorfolk Mutual Insurance Company. Financial Statements December 31, 2016
Financial Statements December 31, 2016 Index to Financial Statements December 31, 2016 MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL REPORTING 1 Page INDEPENDENT AUDITORS' REPORT 2 FINANCIAL STATEMENTS Statement
More information