Sinners & Saints Bill McConnell (The Lloyd’s Actuary) & James McPherson (A Lloyd’s Actuary)

Slides:



Advertisements
Similar presentations
Insurance Premium Risk, Competition and the Insurance Cycle George Maher.
Advertisements

Legislative Audit Division Audit and Rate Review.
1 Risk Management at Progressive Insurance How we got started Getting corporate support Capital Management Examples of deliverables The value risk management.
Claims Reserving for Non Life Insurance Craig Thorburn, B.Ec., F.I.A.A. Phone
0 HARDY UNDERWRITING GROUP PLC FINAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2002 ANALYST PRESENTATION 26 MARCH 2003.
Reserve Variability Modeling: Correlation 2007 Casualty Loss Reserve Seminar San Diego, California September 10-11, 2007 Mark R. Shapland, FCAS, ASA, MAAA.
Loss Reserve Governance Presented by: Robert Giambo Managing Director Swiss Reinsurance America Corp. CAS Spring 2008 Meeting.
Reinsurance Structures and Pricing Pro-Rata Treaties CARe Pricing Boot Camp August 10, 2009 Daniel Kamen, FCAS, MAAA Vice President Allied World Reinsurance.
Insurance & Reinsurance Reserving in the UK Paul Gates, Lane Clark & Peacock Casualty Loss Reserving Seminar, 9/13/99.
Chapter-06 Insurance company operations
Effective Oversight of the Accounting System
1 Enterprise Risk Management for P&C Insurance Companies Shaun S. Wang Robert T. Faber.
The Role of the Actuary in a General Insurance Company Yangon, Myanmar 14 July 2014 Scott Yen.
Operational and Actuarial Aspects of Takaful
Reinsurance Structures and On Level Loss Ratios Reinsurance Boot Camp July 2005.
Pricing Actuaries – Adding Value in a Softening Market Ana Mata, PhD, ACAS Spring CAE Meeting London, 22 May 2008 Mat β las Underwriting and Actuarial.
French working group on Best Estimate: Main conclusions FinReq meeting 17 September 2007.
1 RCM-1 Broadening and Evolving the Ratemaking Role in Insurance Company Management Russ BinghamRatemaking Seminar Vice President Actuarial Research Atlanta,
Advancements in Territorial Ratemaking Allocating Cost of Catastrophe Exposure May 2006 CAS Spring Meeting Stephen Fiete.
Update on Lloyd’s CAS Spring Meeting, Miami May 8, 2001 Todd J. Hess.
Non-Life Loss Reserving Practices and Documentation IAIS – ASSAL Training Seminar April 29, 2009 David Oakden.
«Developing an Effective Model of a Transparent Reinsurance Company in Russia» OJSC «Profile Re» 2008.
1 Practical ERM Midwestern Actuarial Forum Fall 2005 Meeting Chris Suchar, FCAS.
Ratemaking: An ERM Function CAS Ratemaking Seminar March 13 & 14, 2006 Russ Bingham, Hartford Curt Parker, Grange Mutual John Kollar, ISO.
Role of Financial Management Objectives Liquidity Profitability Efficiency Growth Return on Investment Strategic role To provide and manage the financial.
2009 Annual results 24 March © Lloyd’s2009 Annual Results Presentation highlights Record financial results Solid financial position Equitas.
Brian Beckman, KPMG LLP Kevin Bingham, Deloitte Touche LLP George Levine, KPMG LLP Leon Palmer, Director, UTC Self-Insured Reserving September, 2005.
1 Casualty Loss Reserve Seminar September 14, 1999 Presented by: Susan E. Witcraft Milliman & Robertson, Inc. DYNAMIC FINANCIAL ANALYSIS What Does It Look.
Insolvency Tom Crossland. The road to ruin Definitions Financial Services & Markets Act - IPRU(INS) Companies Act Insolvency Act –Balance sheet –Cash.
The Impact of Reinsurance on Primary Company Financials A Case Study Casualty Actuarial Society Loss Reserve Seminar Washington, D.C. September 18 – 19,
Reinsurance Nigel Davies December 2, Reinsurance Session 1 Introduction & Overview. Case Study, Round 1. Session 2 Case Study Feedback. Life Reinsurance.
A Primer on Non-Life Insurance Ratios Craig Thorburn
The Surety Industry and Workers Compensation Guarantees Casualty Actuarial Society Presentation by: Marsh Surety Practice Drew Brach, Managing Director.
Overview of Insurance Operations Types of Insurers Risk Transfer Process Objectives of Insurers Constraints of Achieving Objectives Measurement of Insurer.
The Cost of Financing Insurance Version 2.0 Glenn Meyers Insurance Services Office Inc. CAS Ratemaking Seminar March 8, 2002.
THE REGULATORY ROLE OF THE ACTUARY Chris Daykin UK Government Actuary.
IMPROVING ACTUARIAL RESERVE ANALYSIS THROUGH CLAIM-LEVEL PREDICTIVE ANALYTICS 1 Presenter: Chris Gross.
©2015 : OneBeacon Insurance Group LLC | 1 SUSAN WITCRAFT Building an Economic Capital Model
Using your Actuary as a Strategic Business Partner Presented by Bill Montanez, Jim Shoop, and Jeff Doffing.
Insurance & Reinsurance Reserving in the UK Paul Gates, Lane Clark & Peacock Casualty Loss Reserving Seminar, 9/18/2000.
Spring 2004 CAGNY Meeting How do Rating Agencies Determine Insurance Company Ratings John Andre Vice President Property/Casualty Ratings June 3, 2004.
Technical Rating Models and Airline Risk Differentiators Dan Boultwood 9 th December 2009.
Accounting Implications of Finite Reinsurance Contracts 2003 Casualty Loss Reserve Seminar Chicago, IL Session 4 – Recent Developments in Finite Reinsurance.
RATIO ANALYSIS Unit 4A Partners. Ratio Analysis indicate how well an organisation did show trends in performance over time make comparisons with similar.
Loss Reserving: Is It Broken? What Can Be Done Better? Casualty Loss Reserve Seminar September 14, 2004 Chuck Emma, Pinnacle Tom Ryan, Milliman John J.
BENFIELD GREIG Long Term Reinsurance Buying Strategies modelled using a component based DFA Tool Astin July 2001.
Pitfalls in Common Pricing/Reserving Methodologies David Skurnick St. Paul Re 2001 Seminar on Ratemaking.
PITFALLS IN REINSURANCE PRICING. Trend, Development Beyond Policy Limits Trending vs Detrending Cessions-rated Treaties Bornhuetter-Ferguson Data Issues.
HUA Plc Presentation - Results for year ended 31 st December 2006 Page 1 Heritage Underwriting Agency Plc Presentation Results for the year ended 31 December.
Capital Modeling for Benefit Pools: A Case Study How Much is Enough (for us)?
Consultation on Guidance for (Re)Insurance undertakings on the Head of Actuarial Function Role (CP 103) Presentation to Society of Actuaries in Ireland.
0 July , 1998 Boston, Massachusetts Presented by: Susan E. Witcraft Milliman & Robertson, Inc. Addressing Three Questions Regarding an Insurance.
The Basics of Self Funding
Loss Reserving in Mexico
Operational and Actuarial Aspects of Takaful
Casualty Actuaries of New England
Pierre Laurin.
Insurance IFRS Seminar December 2, 2016 Chris Hancorn Session 32
INTRODUCTION TO REINSURANCE
FINANCIAL STATEMENT ANALYSIS
Pitfalls in Common Pricing/Reserving Methodologies
Insurance Companies and Pension Plans
Catastrophe Modeling Personal Lines Perspective
The Basics of Self Funding
Managing Underwriting Risk & Capital
Overview of Insurance Operations
NAMAF TRUSTEE TRAINING 21 JULY 2018 FINANCIAL MANAGEMENT Koos Du Toit CA (Nam) CA (SA) Financial Director Paramount Healthcare.
Non-Life Loss Reserving Practices and Documentation
Price Change Monitoring in the Lloyd’s Market From a finger in the air to a finger on the pulse September 2011.
5 questions = 7% of the exam
Presentation transcript:

Sinners & Saints Bill McConnell (The Lloyd’s Actuary) & James McPherson (A Lloyd’s Actuary)

Objective Improve Lloyd’s by our actions next year

How? Look at and discuss what we did well and badly Individual action plan to do it better

Sinners? Equitas + Actuaries = Lloyd’s is saved? High Salaries + New Lloyd’s Problems = ? We must deliver !

Where are the Saints?

Ideal time spent? Reserving Input to price Management decisions Opportunity spotting Profitability measurements Strategic projects Other projects

Ideal time spent? Reserving10% Input to price35% Management decisions5% Opportunity spotting20% Performance measurements10% Strategic projects10% Other projects10%

What Value Do You Bring to Lloyd’s?

How have Actuaries performed ?

Summary Movements CRTF

Summary Movements SLTF

Summary of Global Movements

Gross Ultimate Loss Ratios

Explanations of Movements U.S.

Explanations of Movements Global

Distribution of Catastrophe Claims

Movement in Catastrophe incurred Claims

Movement on Catastrophes

Initial Expected Loss Ratios

Forecast of Results

Other Points Claims Inflation. How many syndicates should an actuary be appointed to? Actuarial reports.

Actuaries Roles

Best Practice? Consultant Actuary Syndicate Actuary Underwriter Managing Agency Board Indicated Reserve Syndicate Reserve Lloyd’s + Corporate oversight

Consultants still signing In-House 11% Consultants89% In the future?

Roles Managing Agency - Final say Underwriter / In-house actuaries propose Consultant gives independent benchmark + check for comfort (+ sign off?)

Do you do your bit? Get enough information? Improve the reserves / reserving process? Interpret the results better? Give better feedback on exercise? CUT THE TIME TAKEN ?

Practical Reinsurance Guide

Must do gross of reinsurance and then net down Reinsurance + bad debt is the biggest issue for next year

It is not that hard – each year separately Quota Share- adjusted gross ULR (PC etc) XL- tricky bit (unless Cat protection only) reinstatements Stop loss – Read slip carefully (additional premiums, non renewal clauses) Financial – talk with auditors

Likely issues Bad debt – including delays Reinsurance exhaustion (all “working” layers? – check slips) Much less protection for next year More expensive for next year Hence more finite arrangements?

Good rating index At Policy level Compared to unbiased / objective measure such as rating model Easy to use (no more than 2 inputs per policy)

Suggestions – 1 – in use Change in premium cash terms % Change in non cash terms %

Suggestions – 2 – not in use Expected ULR used in pricing Change in exposure due to change in terms % change in ult exp claims

Very useful Target changes initial expected ultimate loss ratios Pricing Improving models (quality control cycle) Planning Corporate backers will need it.

Why don’t we do this? Ult premiums 1999£50m Renewal percentage80% Change in terms non cash3% Change in terms cash5% New Business£10m Ult premiums 2000£52m* *

Or this? Ultimate loss ratio % Premium Rate change8% Claim inflation5% Initial loss ratio116.7%* *

This calculation is Easy Verifiable Done in most non-Lloyd’s contexts Rarely done in Lloyd’s !

Do all of Lloyd’s example If time (more than 10 minutes to go)

James improvement list All Gross to Net Write up clear Initial Ultimate Expected Loss Ratios for all main classes (Never Underwriters figure unless documented) Allocation by Lloyd’s risk code Benchmark against market stats Reinsurance costs Early warning (US Trust Funds)

Bill’s suggestion All Gross to Net Write up clear Initial Ultimate Expected Loss Ratios for all main classes (Never Underwriters figure unless documented) Allocation by Lloyd’s risk code Benchmark against market stats Reinsurance costs Early warning (US Trust Funds)

Your Improvement List ?