Marblehead_Harbor Basic Track
Overview

The four Basic Track sessions will deliver a comprehensive introduction to Dynamic Financial Analysis. Familiarity with basic financial statements and concepts will be assumed, but depth and subtleties will be limited in the interest of education. Although presenters will assume no previous exposure to Dynamic Financial Analysis, a short list of suggested readings will be provided as part of the seminar confirmation for those who desire to prepare. Later sessions will expand on concepts and terminology from earlier sessions, so attending the sequence of all four sessions is recommended. The emphasis will be on "dynamics." In other words, we will be thinking about what could possibly happen and probabilities associated with possible outcomes.

Constructing and Evaluating Business Plans

Unique challenges arise when applying general business planning to insurance. In overcoming the challenges, some variables will lend themselves to dynamic analysis. Session panelists will define basic DFA terminology, and will be looking at why DFA will enhance the value of planning for an insurer. This session provides a general overview of the business planning process for an insurance company and practical guidelines based on industry experience.

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Panelists:Carl J. Leo, ACAS, MAAA
Omni Insurance Group

Debra J. Roberts
Debra Roberts and Associates, Inc.

Asset and Liability Dynamics

Because insurance company asset and liability values depend on future events, the present value of an insurance company is subject to uncertainty. In this insightful session, one speaker will address asset dynamics and another will discuss liability dynamics. This session will reward you with a variety of insights and important implications for DFA.

Panelists:Gustave A. Krause, FCAS, FCA, MAAA
Arthur Anderson LLP

Stephen J. Mildenhall, FCAS, ASA, MAAA
CNA Re

Objectives and Design

The question that a DFA model is intended to answer critically affects how the model is designed. A planning model for a multistate, multiline company will differ considerably from a model whose objective is to provide information on acquiring a reinsurance company. This session will discuss the interrelationship between the objectives and design of DFA models. Along the way, the presenters will comment on the choice between simulation techniques versus alternatives, and will identify current DFA issues needing further basic research.

Panelists:Gerald S. Kirschner, FCAS, MAAA
Liberty Mutual Insurance Group

Stephen W. Philbrick, FCAS, FCA, MAAA
Tillinghast-Towers Perrin

A Basic Model for DFA

The content of this session is based on a paper submitted to the 1997 DFA Call Paper Program. The presenters will assume that the audience has attended sessions I, II and III, and will also assume that the audience has no prior exposure to a working DFA model. In this session, you will learn about a workable, publicly available DFA model that seeks to reflect measurable risks that are most relevant to property-liability insurers in the United States. Model parameters will be explored with emphasis on user decision making. The final half-hour is set aside for group discussion and interactive changes to the model.

Panelists:Stephen P. D'Arcy, FCAS, MAAA
University of Illinois

Charles C. Emma, FCAS, MAAA
Miller, Rapp, Herbers & Terry, Inc.


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