1. LOOKING BACK…focused on the future
CIA Annual Meeting
LOOKING BACK…focused on the future

2. Agenda SOE - why? – Gary Walters Insured Life & LTD - Jonathan Ferron
Refund, ASO, stop Loss, etc – Ron McKellar
Wrap up – Outstanding issues for Group – Gary Walters & YOU!

3. Required by OSFI for 31 Dec 2004 and annually thereafter
Disclosure of few sources
Aggregate results for all parts of company
Calculation will have to be done at more detailed level
CIA - Draft Educational Note
Broadly profit released on New Business and movements in levels of PADs
Limited guidance for Group

4. Drivers of Group profit varies:
By product (Life, LTD, Med/Den behave differently)
By funding method (Insured, refund, ASO behave differently)
By type (employer/employee, creditor, affinity)

5. In addition can be calculated by:
Market segment e.g. size
Region/province
Sources required
Expected profits
Profit from New business
Profit from experience
Changes in assumptions
Interest on surplus
Taxes

6. Breakdown of sources Expected Experience Premium loads Pad releases
Mortality/morbidity
Interest
Experience
Expenses
(Reinsurance)
Unusual items & error corrections

7. Uses Statutory reporting annually
Explanation to Management current quarter
Financial
Non-Group
Non-Financial
Strategic
Expense management
Claims payment effectiveness
Sustainability
Planning/DCAT/EV

8. Unresolved Group Issues
Definition of New Business
Where do you put PADs on new LTD claims?
Would you split PADs on expected claims from those on claims which are not expected?
Are profit loads in premiums part of renewal profits?
How do you decide what % of premium is for profit and what for claims?
If you negotiate a renewal rate would such adjustment apply equally to premium load as to portion of premiums for claims & expenses?
Do ASO & refund cases only generate expense gains or is there a portion for profit?
Pricing or valuation bases?