2006 Ratemaking Seminar Audio Sessions

These narrated handouts are available in Power Point Presentation format. If you do not have Power Point on your computer, you will need to download the free Power Point Viewer, which is a 2.8 MB file.

A complete listing of seminar handouts are also available online.

* Handouts do not have audio accompaniment.

Commercial Lines Sessions

COM-2: Product Development: Practical Considerations from Both Commercial and Personal Lines Perspectives
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In a role outside of the traditional pricing and loss reserving functions, an actuary can make a substantial contribution to product development. This session is designed to illustrate applications in personal and commercial lines.

With respect to personal lines, the insurance landscape is littered with examples of carriers who have made enthusiastic entries into new markets (states, lines of business, distribution channels) only to find higher than expected costs and a far longer payback period than initially anticipated. This portion of this session will focus on lessons learned from successful and unsuccessful entries into new markets and ways to lessen the risks inherent in such forays. Implications for pricing, product design, underwriting, claims, and marketing will be discussed. For commercial lines, as new insurance coverages are developed, the actuary must determine pricing without the reliance on traditional insurance data. This portion of the session will discuss the process of developing pricing for non-traditional insurance coverage’s.

Moderator:

Panelists:

COM-4: Pricing Programs, Excess, and Surplus Lines

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The importance of alternative mechanisms to underwriting property and casualty insurance has increased as market cycles have impacted the traditional markets. This session will explore two of these mechanisms, excess and surplus lines and programs. Pricing Actuaries working in companies underwriting this business often function in close alignment with other disciplines such as underwriting and marketing. The speakers represent companies underwriting business in each of these segments. Differences in business characteristics, regulation, marketing, and types and classes of business underwritten will be discussed. Also covered will be the approaches pricing actuaries use to address the unique challenges these differences create as well as changes in these markets over the past few years.

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Panelists:

Data/Technology Session

Data-2: Information Stored, Mined and Utilized

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Warehousing data can prove to be an expensive prospect and it may be difficult to convince management of its benefits. One approach is to develop a database using traditional methods and data warehousing principles. As the utility of the increased availability of information becomes apparent, increased investment in the project may become less difficult to justify. This session will illustrate the creation of databases that evolve into useful warehouses.

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Personal Lines Sessions

PL-2: An Introduction to GLM Theory

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The use of generalized linear models (GLMs) has taken the North American property/casualty insurance industry by storm, in many cases replacing traditional one-way actuarial analyses. This session is designed to provide the actuary with an overview of the statistical theory of GLMs and give illustrative examples and intuitive explanations that clarify the theory. The session will begin with an explanation on the formularization of GLMs-understanding the linear predictor, link function, offset term, error term, and the like. Building upon this foundation, the session will discuss typical model forms, the effect of different assumptions, model diagnostics and the use of interaction variables. (Practical applications of GLM theory will be covered in another panel session.)

Moderator/Panelist:

Panelist:

PL-6: Implementing a New Rating Structure Based on Predictive Modeling
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Predictive modeling using multi-variate analysis is a relatively new hot topic for the P&C industry in the U.S. Although some companies have already gone down this road, there are a number of small to midsize companies that are just starting. As assistant vice president of property and casualty pricing for a company that has recently developed and put into production a new rating structure based on predictive modeling, this session's panelist will share his company's experiences in developing and implementing this large project. Specifically, the time and resources that were required, data issues, blending modeling into the existing rate review process, systems issues, testing and moving to a full production environment for subsequent states.

Moderator:

Panelist:

The snowflakes next to the session title indicate the level of difficulty for each session.

	No prior knowledge of the subject matter is assumed. Little or no technical content.
	General knowledge of the subject matter is assumed. Moderate technical content.
	Working knowledge of the subject matter is assumed. Moderate to highly technical content.
	Extensive technical/theoretical knowledge of the subject matter is assumed. Highly technical content.

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2006 Ratemaking Seminar Audio Sessions

Commercial Lines Sessions

COM-4: Pricing Programs, Excess, and Surplus Lines

Data/Technology Session

Data-2: Information Stored, Mined and Utilized

Personal Lines Sessions

PL-2: An Introduction to GLM Theory