Limited Attendance Workshops
The Board of Directors recently approved a task force recommendation for the CAS to offer workshops on general business skills. Frontline Communispond Division, the oldest and largest business communications and sales training company in the U.S., has been engaged to teach limited attendance workshops at this meeting. Please note that there will be a $50 fee to attend one of these workshops.
Current Trends in D&O and E&O Insurance
This panel will discuss current trends in Director’s & Officer’s Liability Insurance and Errors & Omissions Professional Liability Insurance. The impact of legislative changes, recent market volatility, coverage enhancements, and increased market capitalization has been substantial, presenting new challenges for actuaries who are pricing these risks.
The panelists will discuss how recent developments have affected account pricing and influenced underwriting decisions for D&O and E&O coverages. In addition, the results of the Tillinghast Director’s & Officer’s Liability Survey will be discussed.
Executive Presentations Skills
This workshop will be a half-day session on Tuesday, November 14th, and will be offered twice. It will be limited to the first 30 (15 per session) registrants. The objective of this workshop is to develop skills that make a presentation clear, compelling, and effective. Using subject matter from your own work environment, you will learn to heighten your awareness of how you look and sound to others, and you will be taught the fundamental skills to control nervousness so you can think clearly on your feet. In addition, this workshop will enable you to be spontaneous and naturally dynamic, so you can overcome inhibitions and project your message.
Negotiation Skills
Participants will learn how to negotiate agreements and build positive relationships with their clients or peers. This workshop will be limited to the first 15 registrants. They will develop a negotiating strategy that helps them work with their clients’ interests and concerns, better represent their own company’s interests and strategic goals, and collaborate to reach an agreement satisfying to both the client and their company. During a full day of engaging exercises, participants will learn to open the negotiation process with a positive tone, probe to find the client’s interests and concerns, listen to the client’s negotiating position, say "no" tactfully and credibly, and close on agreements and commit to next steps. Participants will learn the skills of effective negotiation through numerous practice sessions, role plays using their own subject matter, individual coaching by the instructor, and group feedback.
Proceedings Papers
CAS ProceedingsPapers that have been recently approved by the Committee on Review of Papers, and discussions of previously published Proceedings papers will be presented at this meeting.
Please note that these papers will be available by the end of October on the CAS Web Site. If you do not have access to the CAS Web Site, you may fax your request for printed copies of the papers to the CAS Office at (703) 276-3108.
New Classes of Claims/Megatort Update
This panel will discuss recent developments in the continuing claim reserving problems with Asbestos and EIL claims. In addition, the panel will discuss the appearance of new potential megatort situations and how precedent-setting litigation may affect how new claim situations are handled by plaintiffs, courts, and insurers.
Moderator:
Jennifer L. Biggs
Consulting Actuary
Tillinghast-Towers Perrin
Panelists:
Philip D. Miller
Consulting Actuary
Tillinghast-Towers Perrin
Barbara K. Murray
Assistant Vice President
Argonaut Insurance Company
Current Trends in D&O and E&O Insurance
This panel will discuss current trends in Director’s & Officer’s Liability Insurance and Errors & Omissions Professional Liability Insurance. The impact of legislative changes, recent market volatility, coverage enhancements, and increased market capitalization has been substantial, presenting new challenges for actuaries who are pricing these risks.
The panelists will discuss how recent developments have affected account pricing and influenced underwriting decisions for D&O and E&O coverages. In addition, the results of the Tillinghast Director’s & Officer’s Liability Survey will be discussed.
Moderator/
Panelist:
Mark W. Larsen
Consultant
Tillinghast-Towers Perrin
Panelists:
Bernard R. Horovitz
Assistant Vice President and Actuary
Chubb Executive Risk
Cynthia Traczyk
CNA Insurance Companies
Emerging Nontraditional Products
Recent trends in underwriting have seen the introduction of new primary insurance products that cover unique risk transfer arrangements. Many of these new products are designed to facilitate a particular financial transaction including mergers, acquisitions, and portfolio divestitures.
The first speaker will provide a survey introduction to the most prevalent nontraditional insurance and reinsurance products on the market today, as well as an overview of some of the newer products. The talk also discusses some of the dangers that actuaries face in trying to price these products.
Loss Mitigation Insurance is an insurance product designed to transfer the risk of future development on catastrophe claims shortly after their occurrence. Loss Mitigation Insurance is tail coverage that can provide certainty to a contingent liability enabling a company to smooth earnings by spreading the cost rather than taking a one-time charge. It can cap what would otherwise be an unknown amount due to potentially long, protracted litigation and uncertain costs.
Representations and Warranties Insurance is an insurance product that is designed to cover losses sustained by designated parties during business transactions. Business transactions can include mergers, acquisitions, buyouts, and spin-offs.
These and other forms of alternative risk transfers will be discussed.
Moderator/Panelist:
Gary Blumsohn
Vice President
St. Paul Re
Panelists:
Chris E. Nelson
Vice President
CNA Re
Marvin Pestcoe
Swiss Re New Markets
Prescription Drugs and the Workers Compensation System
A recent study, conducted on behalf of the California Commission on Health and Safety and Workers Compensation, focused on the pharmaceutical expenses in the workers compensation system. In particular, the study examined potential savings from modifications to the current approach to regulating prescription drugs under the current system.
The high cost for prescription drugs in workers compensation is consistent with recent research suggesting medical treatment costs were 50% to 100% higher under workers compensation than for treatment under employer health plans for similar conditions. However, this previous research didn’t examine pharmaceutical costs.
What are the prospects for savings to the workers compensation system from controls on the cost of prescription drugs? What lessons can we learn about the impact these costs have on the overall system? What does the future hold?
This panel will present the results of their research on the topic.
Moderator/
Panelist:
Alex Swedlow
Consultant
California Workers Compensation Institute
Panelist:
Laura Gardner, MD
Axiomedics Research, Inc.
The Actuary and Earnings Management
Investors of insurance companies, as well as other organizations, place an enormous amount of attention and weight on reported earnings. Concerned with a perceived deterioration in the quality of financial reporting, the Securities and Exchange Commission recently increased its scrutiny of reported earnings for publicly registered companies. Loss and loss adjustment expenses have a significant impact on the income statement of insurance companies. Because reserves are generally complex and difficult to estimate, management often relies heavily on actuaries to set its reserves.
What effect does this have on actuaries and their abilities to present reasonably stable estimates of loss and loss adjustment expenses from period to period given the inherent uncertainty underlying these liabilities? Does this force actuaries to be overly responsive and less stable in their estimates to avoid giving the appearance of earnings management? What type of movement in loss and loss adjustment expense reserve estimates from period to period constitutes earnings management? Does presenting the results in a range instead of just a point estimate eliminate the need for the actuary to be concerned about earnings management?
These and numerous other issues will be discussed by a panel of insurance, audit, and financial experts.
Moderator:
Marc F. Oberholtzer
Principal Consultant
PricewaterhouseCoopers LLP
Panelists:
Matthew J. Adams
Partner
PricewaterhouseCoopers LLP
William M. Wilt
Vice President-Senior Analyst
Moody’s Investors Service
Non-U.S. DFA: Are They Doing That Too
Dynamic financial analysis has been the hot topic for casualty actuaries in the U.S. recently. But did you know that actuaries outside the U.S. are also involved with DFA and have been for some time? It may be masquerading as dynamic solvency testing, dynamic capital adequacy testing or model office, but actuaries worldwide are still moving down the same path, though maybe at different rates and with some detours.
This session will explore the history of DFA outside of the U.S., the types of models being constructed, and the current research taking place. Discussion will take place on the similarities and differences in the approaches to DFA between U.S. and non-U.S. actuaries and how that affects the models being developed. The possibility of DFA or something similar being used for regulation purposes will also be discussed.
Moderator:
Susan E. Witcraft
Consulting Actuary
Milliman & Robertson, Inc.
Panelist:
Stavros Christofides
Consultant
Bacon & Woodrow
Introduction to the CAS Examination Committee
The purpose of this session is to provide Fellows who have never served on the CAS Examination Committee with an overview of the responsibilities and objectives of this committee. New Fellows are encouraged to attend.
Moderator:
Thomas G. Myers
Vice President
Prudential Property & Casualty Insurance
Panelists:
J. Thomas Downey
Manager, Admissions
Casualty Actuarial Society
Actuaries in Non-traditional Practice Areas - Case Studies
Casualty actuaries are continuing to expand into nontraditional areas of practice, including those related to risk management, financial management and public policy lobbying efforts.
Designed as an outreach to our public, the External Communications Committee will host several case studies on the topics of securitization, enterprise risk management, and public policy lobbying efforts related to federal natural disaster legislation. The press will be invited, along with all CAS members, to discuss the actuary’s role in these assignments. Each case study will describe the issue or controversy, highlight how it was resolved and express a bottom line result.
The Committee hopes that through the process of questions and answers, the increasing role of the actuary will become better understood by the public.
Moderator:
Robert F. Wolf
Chairperson
External Communications Committee
Panelists:
David Fishbaum
Principal
William M. Mercer, Inc.
Rade T. Musulin
Vice President-Actuary
Florida Farm Bureau Insurance Companies
The Actuary’s Role in Due Diligence
Mergers and acquisitions in the property and casualty industry are becoming commonplace. The key activity in the mergers and acquisition process is due diligence, and the actuary’s role can be quite large on both sides of the transaction. Due diligence is an often-used term but its formal definition may not be so widely understood. This panel will define the term and discuss the activities that an actuary typically performs during due diligence. Discussions will highlight where the skill sets required draw from topics covered by readings on the CAS Syllabus of Examinations. The panel will also address areas where actuaries should seek to add value to the due diligence process beyond the scope of the current syllabus material.
Moderator:
Stuart G. Sadwin
Vice President & Actuary
CGU Insurance Companies
Panelists:
Gail M. Ross
Vice President
Am-Re Consultants, Inc.
Gayle Haskell
Chief Financial Officer and Chief Actuary
Providence Washington Insurance Company
AAA Securitization Task Force
In October 1998, the NAIC formed the Securitization Working Group to evaluate regulatory changes to support capital market alternatives. The working group asked the American Academy of Actuaries to provide technical assistance in understanding and measuring the effectiveness of index-based insurance derivatives in hedging insurance transactions.
Earlier this year the Academy’s Index Securitization Task Force, jointly with CAS Committee on Valuation, Finance and Investing, undertook research to evaluate appropriate statistics used to measure hedge effectiveness and make final recommendations regarding the statistical measurement of hedge effectiveness. The task force also provided comments of the appropriate accounting treatment for aggregating the results of multiple hedge transactions. This panel will present the findings of the research performed and discuss the accounting treatment of index-based insurance derivative transactions. It will also discuss the Academy’s viewpoint on the future of insurance securitization.
Moderator:
Frederick O. Kist
Senior Vice President and Chief Actuary
CNA
Panelists:
Glenn G. Meyers
Chief of Actuarial Research and Assistant Vice President
Insurance Services Office, Inc.
William F. Dove
Vice President
Centre Solutions
The View from Overseas
Recently, many U.S. insurance and reinsurance companies have either been bought by overseas insurance entities or have bought overseas insurance operations. In addition, several companies have relocated to offshore locations, such as Bermuda. Is this just increased globalization or are there other factors that need to be taken into consideration?
How is the U.S. insurance and reinsurance market viewed by the non-U.S. market? How do actuaries aid in that perception? Why are some U.S. companies redomiciling to Bermuda and other offshore locations? What is the reaction to the CAS decision against mutual recognition? This session will provide a panel of international and offshore actuaries to give the "view from overseas" and answer these questions.
Moderator:
John C. Narvell
Chief Actuary
Winterthur International
Panelists:
John C. Burville
Chief Actuary
ACE Bermuda Insurance Co, Ldd.
Actuarial Statements of Opinion and ASOP 36
The Actuarial Standards Board recently released ASOP 36, the actuarial standard of practice relating to Statements of Actuarial Opinion Regarding Property/Casualty Loss and Loss Adjustment Expense Reserves. As this standard applies to statements of actuarial opinion subsequent to October 15, 2000, it will be relevant for actuaries involved with year-end 2000 reserve opinions.
The panel will discuss what the new standard means for practicing actuaries and how the form and content of actuarial reports will be affected. Whether the standard applies to all statements of actuarial opinion, what is meant by "material adverse deviation," and how one evaluates "materiality" will also be addressed.
The Committee on Property and Liability Financial Reporting (COPLFR) will present the new requirements for 2000 Statements of Actuarial Opinion from the NAIC, and discuss implementation issues of ASOP 36 as they relate to guidance provided to actuaries in the Practice Note.
Moderator/Panelists:
Paticia A. Teufel
Principal
KPMG LLP
Joseph A. Herbers
Principal and Consulting Actuary
Miller, Herbers, Lehmann & Associates
Robert H. Wainscott
Principal
Ernst & Young LLP
NAIC Redefinitions of Loss Adjustment Expense
Effective January 1, 1998, the NAIC adopted a change in how loss adjustment expense is split into categories within Schedule P of the Annual Statement. In March of 2000, the CAS Loss Reserve Committee surveyed loss reserve practitioners on how these changes affected loss reserving since 1998 and how they may impact future years. The survey also addressed other aspects of actuarial work which would be affected by the change, such as reinsurance, ratemaking, as well as expense allocations.
The session will summarize the results of this survey. It will discuss the manner in which companies classified expense (ALAE and ULAE pre-1/1/98, as well as DCC and A&O post-1/1/98) as well as the major types of expense reclassifications caused by the change in Annual Statement instructions. The session will further discuss the method companies utilized to implement the change (accident versus calendar year) and whether they are maintaining separate expense allocation systems (one to accommodate the Annual Statement change and one for other purposes, such as reinsurance and ratemaking). Reserving challenges of dealing with this Annual Statement change will be discussed and the more creative reserving solutions will be presented.
This session is a must for any practicing reserving actuary or anyone who makes use of Schedule P information to evaluate insurance companies.
Moderator:
Charles F. Cook
Consulting Actuary
MBA Inc.
Panelists:
W. H. Odell
President
Odell & Associates, Inc.
John A. Stenmark
Vice President
Southern Farm Bureau Casualty Insurance Company
Richard M. Carris
Senior Claims Consultant
Ernst & Young, LLP
The e-volving CAS
As the importance of the internet has increased, the Casualty Actuarial Society has evolved into an organization which offers significant electronic opportunities. The CAS website, for example, is now a key source of actuarial information: on-line discussions, download capabilities, examination information, and many other items are available to members and, in many cases, non-members. This session will provide an overview of the CAS website, describe recent developments on the site, and discuss future enhancements. The website’s use as a tool for practicing actuaries and researchers will be explored. Other electronic opportunities provided by the CAS, such as on-line continuing education courses, will also be described. Comments and suggestions on the future of the CAS’s electronic products will be welcomed.
Moderator/Panelist:
Theresa A. Klodnicki
Committee on Online Services
Panelist:
Janet Dauber
Webmaster
Casualty Actuarial Society
Report of CAS Advisory Committee on Enterprise Risk Management
The recently formed CAS Advisory Committee on Enterprise Risk Management will discuss the following topics:
the definition and scope of ERM for purposes of CAS activity,
committee goals and timetable,
subcommittee charges and
ultimate deliverables to the membership.
Moderator:
Andrew T. Rippert
Senior Vice President
Deloitte & Touche LLP
Panelists:
Lawrence F. Marcus
Director & Associate Actuary
ACE USA
Chris E. Nelson
Vice President
CNA Re
CAS Research Corner
There are numerous people in the CAS who are performing interesting and important research. There are even more CAS members who would benefit from exposure to many of those research efforts. This session provides an opportunity for attendees to speak informally with actuaries who have done research that might be of interest and benefit to them. Each presenter will have a display area in the meeting room where results of their research can be exhibited. Attendees can talk to presenters about their research work one-on-one, or they can simply peruse the exhibited materials at their leisure.
Actuaries in an e-World
The Internet has already had a profound effect on the insurance industry, and many more changes are in process and on the horizon. Actuaries are faced with many new challenges as a result of the use of the Internet as an insurance sales channel. This session will examine some of these unique issues, such as:
- Preventing fraud with internet sales
- Sources and use of outside data verification
- More intelligent data collection, i.e., what data is really needed?
- Refined ratemaking approaches
- Use of additional data available via a website
- Inconsistent pricing information gathered from comparative websites
- Effectiveness of cross-selling products
These and many other issues will be presented by the following panelists, who are working in the e-business arena, bringing perspective from both the business-to-consumer and business-to-business markets.
Moderator:
John F. Gibson
Principal
PricewaterhouseCoopers LLP
Panelists: John S. Peters
Director of Business Development
OneShield.com
Nancy P. Watkins
Consulting Actuary
Milliman & Robertson, Inc.
B. C. Verniero
Vice President of Marketing & Internal Development
Homesite Insurance
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