Reserving for Automobile Warranty and Other Long Duration Contracts Auto Warranties And Auto Extended Service Contracts Grover Edie.

Slides:



Advertisements
Similar presentations
Introduction to Property & Casualty Actuarial Presenter: Matt Duke.
Advertisements

Unearned Premium Reserves Change is in the Wind
Engine & Transmission Fleet Warranty Engine & Transmission Warranty.
Lesson 10.1 Automobile Basics July 2011Copyright © … REMTECH, inc … All Rights Reserved1 Introduction The automobile is the primary mode of transportation.
CORPORATIONS: DIVIDENDS, RETAINED EARNINGS, AND INCOME REPORTING CHAPTER 15.
CAS Seminar on Ratemaking
Introduction to Reinsurance Reserving Peter A. Royek Toa Reinsurance Company of America Casualty Loss Reserve Seminar Scottsdale, Arizona September 13,
Agenda Introduction to Credibility Difference between Policy Year, Accident Year, and Calendar Year Relationship Between Accident Year and Calendar Year.
1 Ken Fikes, FCAS, MAAA Introduction to Casualty Actuarial Science November 2005.
Ch14--In301 Types of Policies Multiple-line 1st party property 3rd party liability 3rd party medical expense Multiple-peril Fire, windstorms, theft, etc.
Personal Finance Garman/Forgue Ninth Edition
317_L11, Jan 30, 2008, J. Schaafsma 1 Review of the Last Lecture began our discussion of health insurance and its impact on the healthcare market Defined.
Thursday March 9, 2000 Ted Dew Emerging Risks (COM-45) CAS 2000 Seminar on Ratemaking - San Diego.
4. Quantitative Methods & Applications BUS 200 Introduction to Risk Management and Insurance Fall 2008 Jin Park.
Buying a Vehicle Cost of owning a vehicle: 1.Purchase Price – Amount paid for a vehicle 2.Depreciation - decrease in value over time 3.Financing - how.
Reserving for Long-Duration Policies Presented by Roger M. Hayne, FCAS, MAAA CLRS, San Diego, CA September 10-11, 2007.
7 CATEGORIES OF COSTS 1. Depreciation 2. Financing 3. Insurance 4. Taxes & Fees 5. Fuel 6. Maintenance 7. Repairs.
Introduction to Reinsurance Reserving Casualty Loss Reserve Seminar Washington, D.C. September 23, 2002 Bruce D. Fell, FCAS, MAAA Am-Re Consultants, Inc.
Lesson 10.2 Purchasing a Vehicle July 2011Copyright © … REMTECH, inc … All Rights Reserved1 Introduction Buying a vehicle generally involves.
A New Exposure Base for Vehicle Service Contracts – Miles Driven CAS Ratemaking Seminar – Atlanta 2007 March 8, 2007Slide 1 Discussion Paper Presentation.
08 Dec Accountant Perspective On Appraisal Value Derivation Conference: Dynamic Solvency Testing & Appraisal Value Thursday, 8 December 2005 Ballroom.
1 COM - 29 Package Pricing for Small Commercial Accounts Roy G. Shrum.
Insurance Company: Functions Chapter 7. Insurance related functions Ratemaking Production Underwriting Loss adjustment Investment Reinsurance Accounting,
Intensive Actuarial Training for Bulgaria January 2007 Lecture 5 – General Insurance Overview and Pricing By Michael Sze, PhD, FSA, CFA.
Chapter 19 Outline Coping with Risk Why Life Insurance? Basic Elements of Life Insurance Buying Life Insurance: Who needs it and How Much? Insurance When.
Insurance Terms Business Essentials. Term Insurance An insurance policy that provides coverage for a limited period, the value payable only if a loss.
© 2005 Towers Perrin September 12, 2005 Michael Angelina, ACAS, MAAA – Endurance Specialty Holdings Kevin Downs, FCAS, MAAA – Towers Perrin Bruce D. Fell,
Ab Rate Monitoring Steven Petlick Seminar on Reinsurance May 20, 2008.
Finance 431: Property-Liability Insurance Lecture 6: Ratemaking.
1999 CASUALTY LOSS RESERVE SEMINAR Intermediate Track II - Techniques
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Auto Insurance Information Mr. Blais Law and You.
Non-Medical Professional Liability Denise Olson, FCAS, MAAA CNA Pro.
Integrating the Broad Range Applications of Predictive Modeling in a Competitive Market Environment Jun Yan Mo Mosud Cheng-sheng Peter Wu 2008 CAS Spring.
ECONOMICS Chapter 5 Section 3. Key Terms  subsidy: a government payment that supports a business or market  excise tax: a tax on the production or sale.
Mechanical Breakdown Insurance Updated: 01/19/2000.
1 LONG DURATION POLICIES Presented by Grover M. Edie, FCAS, MAAA CLRS San Diego, CA September 10-11, 2007.
1999 CAS RATEMAKING SEMINAR PRODUCT DEVELOPMENT (MIS - 32) BETH FITZGERALD, FCAS, MAAA.
Ab Rate Monitoring Steven Petlick CAS Underwriting Cycle Seminar October 5, 2009.
Contingent Liability Risk Retention Groups for Automobile Warranty Companies Mark J. Sobel, FCAS, MAAA Financial Risk Analysts, LLC.
 Washington State Transit Insurance Pool Actuarial Report Based on data evaluated as of June 30, 2008 Presented by: Kevin Wick, FCAS, MAAA September.
JLT RE SOLUTIONS, INC. Introduction to Reinsurance Reserving Las Vegas, Nevada September 13, 2004 Bruce D. Fell, FCAS, MAAA, CFA Casualty Loss Reserve.
Capital Allocation for Property-Casualty Insurers: A Catastrophe Reinsurance Application CAS Reinsurance Seminar June 6-8, 1999 Robert P. Butsic Fireman’s.
©Towers Perrin Introduction to Reinsurance Reserving Casualty Loss Reserve Seminar Atlanta, Georgia September 11, 2006 Christopher K. Bozman, FCAS, MAAA.
Introduction to Reinsurance Reserving Casualty Loss Reserve Seminar Chicago, Illinois September 9, 2003 Christopher K. Bozman, FCAS, MAAA.
CAE Meeting – Zurich April Nov What’s your expectation?
CASUALTY LOSS RESERVE SEMINAR Reserving for Automobile Warranty and Other Long Duration Contracts Moderator:Wayne Holdredge Panelists:Grover Edie John.
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
0 July , 1998 Boston, Massachusetts Presented by: Susan E. Witcraft Milliman & Robertson, Inc. Addressing Three Questions Regarding an Insurance.
Ratemaking Actuarial functions Ratemaking Loss reserving Data collection and analysis Profitability analysis Competitive analysis Prepare statistical reports.
CH 12, 12.3 To Buy or Lease?. FACT: More than 80% of people finance their car purchase. Advantages of financing through a dealership? convenience low.
1998 CASUALTY LOSS RESERVE SEMINAR Intermediate Track II - Techniques
Insurance
Actuarial role/ contributions/ challenges in Reinsurance
Risk Management 101.
Reserving for Automobile Warranty and Other Long Duration Contracts
Ratemaking Actuarial functions Ratemaking Loss reserving
Introduction to Reinsurance Reserving
1999 CLRS September 1999 Scottsdale, Arizona
Methods for Including Investment Income in Rates
Compare plans for Surface Pro, Surface Book, and Surface Laptop
CASUALTY LOSS RESERVE SEMINAR
CASUALTY LOSS RESERVE SEMINAR
John Kerper, FSA, MAAA JHK Company
Can you afford a car? Automobile Simulation.
No, Really, You Can Use DFA for Ratemaking, Too!
בטיחות בתעשייה בהיבט חברות הביטוח
INSURANCE CLAIM PRINCIPLES AND TERMS OF INSURANCE BUSINESS
Chapter 5: Supply Section 3
Chapter 5: Supply Section 3
Presentation transcript:

Reserving for Automobile Warranty and Other Long Duration Contracts Auto Warranties And Auto Extended Service Contracts Grover Edie

Reserving for Automobile Warranty and Other Long Duration Contracts Earnings patterns are closely guarded by ESC writers (also, no “bureau” for data) Earnings patterns in this presentation are purely fictitious - any semblance to actual earnings patterns is accidental Earnings patterns vary considerably due to variations in coverage, vehicle, deductible, time/mileage limits, etc.

Reserving for Automobile Warranty and Other Long Duration Contracts New Car Manufacturer Warranties ESC Sold when new car placed into service “Extended Eligibility” new vehicle ESC’s Used Vehicle ESC’s

Auto Warranties and Auto Extended Service Contracts Problems: Earnings occur over several calendar years Exposure does not earn evenly over those calendar years Some contracts have more than one earnings path (example: time AND mileage)

Auto Warranties and Auto Extended Service Contracts Good news / Bad News: Vehicles are sold with no practical means of revising their warranties, other than to expand the coverage ESC Sales are essentially “one shot,” there are no renewals (rate changes do not affect current book of business)

Auto Warranties and Auto Extended Service Contracts Warranty Accruals or ESC considerations For warranty accrual estimates, talk to the engineers, if you can Talk with the people that price the ESC product Talk with the people who market the ESC product to understand any shifts in distribution, new programs, etc. Vehicle “Content” can change over time

Auto Warranties and Auto Extended Service Contracts Losses Often, there are no case reserves, only payments Earned premium is not proportional to time, so loss ratio methods can be misleading Catastrophes CAN happen (“spills”)

Auto Warranties and Auto Extended Service Contracts Time in service or since contract inception Data Elements (Pure Premium, etc.)

Vehicle Manufacturer’s Warranties

Auto Extended Service Contracts (or “Extended Warranties”)

Example of ESC Earning Pattern

Example of ESC Earning Pattern - Steady State

Example of ESC Earning Pattern Stop at End of Year 8

Example of ESC Earning Pattern - Steady State

Feedback: Privacy Policy Feedback
Do Not Sell My Personal Information
About project: SlidePlayer Terms of Service

© 2025 SlidePlayer.com. Inc. All rights reserved.