Casualty Actuarial Society

Research

Committee on Reserves - 2004 Call Paper Program

The complex issues that are challenging the property-casualty insurance industry continue to impact the actuarial profession and the reserving process within our profession. Actuarial expertise is needed to deal with changing and unique exposures as well as to evaluate the adequacy of current methods. As new and complex issues evolve, the need for actuaries to communicate their opinions in an effective manner to various audiences is crucial. The CAS Committee on Reserves is seeking papers related to the reserving process including, but not limited to, those dealing with the following topics:

  • Opinion Issues: : Issues related to the requirements for property and casualty reserving that impact the preparation of Statements of Actuarial Opinion including:

    • ASOP No. 36 issues, including materiality, adverse deviation, and the expected value estimate;
    • Management's best estimate vs. the actuary's selected point estimate;
    • Reserve to capital leverage and its impact on materiality and disclosures.

  • Unique or Changing Exposures: Reserving for:

    • Terrorism;
    • Natural catastrophes;
    • Asbestos, tobacco, and other mass torts;
    • Environmental liability;
    • Construction defect claims;
    • International insurance exposures;
    • Mold and other new exposures;
    • Cumulative Injury;
    • Large deductible workers compensation;
    • Recent legislation and/or court decisions;
    • New products and/or new markets.

  • Best Estimates, Variability, and Ranges: Evaluation of the best estimate, variability, and reasonable ranges of loss and loss adjustment expense liabilities including:

    • Derivation and measures of best estimate and reasonable range;
    • Combining best estimates, correlation, and ranges for several lines of business;
    • Interaction of range, variability, risk-margin, and discounting;
    • Interaction of range and accounting standards, i.e. Statutory Accounting Principles, Generally Accepted Accounting Principles, international accounting standards, and fair value accounting.

  • Methodologies: In the last two decades, a prolific CAS membership has produced numerous articles and papers presenting a wide array of new methods for various reserving circumstances. So, a new survey paper that compares and contrasts several such methods, new and old, would be welcome. Also sought are papers presenting new or improved reserving techniques that consider:

    • Economic and/or social inflation (especially changing inflation);
    • Changing economic conditions (e.g. unemployment impact on workers compensation);
    • Company operational changes;
    • Premium deficiency reserves;
    • Adjusting & Other LAE vs. Unallocated LAE;
    • Defense & Cost Containment LAE vs. Allocated LAE;
    • Dynamic financial analysis;
    • Simulation techniques;
    • Data issues (reserving techniques and/or reconciliation);
    • Excess layers, including modeling the development of individual claims.

  • Other Matters Affecting Reserving

    • Rehabilitations (short-term and long-term) and liquidations and their impact on LAE and/or losses;
    • Retroactive reinsurance and financial reinsurance;
    • Commutations, novations, policy buybacks, and their impact on reserves (ceded and/or assumed);
    • Reinsurer collectibility issues and coverage disputes
Call Paper Timetable
Timely submission of papers is critical to the success of the call. The procedures and timetable enumerated below will apply.
  • Deadline for Proposals
    By July 9, 2003, authors should submit proposals for their papers including the title, a short description of the topic(s) to be addressed, and the approach that will be taken. Proposals should be submitted electronically via e-mail to the Casualty Actuarial Society at office@casact.org. Please put "2004 Reserves Call Paper Proposal" in the subject line of the e-mail message.
  • Acceptance of Proposals
    The Committee will make a decision on all proposals. The number of accepted proposals may be limited. The Committee will contact authors regarding their proposals.
  • Monitoring Progress
    A Committee member will be assigned to work with each author to monitor the paper's progress and provide general guidance in completing the paper. By mutual agreement, the author and the assigned Committee member will establish a schedule for the production of interim drafts.

    By December 17, 2003, a first draft of the completed paper (including an abstract of no more than 200 words) should be submitted to the assigned Committee member for review.

    By April 15, 2004, comments on the first draft will be forwarded to the author.

  • Completion Date
    By June 3, 2004, the Committee on Reserves must receive the completed paper for their review. Each paper will be screened by the Committee to assure its quality of exposition and relevance to the call. The Committee may require further rewriting of the paper to bring it to an acceptable standard.
  • Approving the Completed Paper
    By July 15, 2004, all authors will be notified as to the results of this screening process. Accepted papers will be published in the CAS Forum and will be available on the CAS Web Site prior to the 2004 Casualty Loss Reserve Seminar. Authors may be invited to present their papers at the CLRS scheduled for September 13-14, 2004 in Las Vegas, NV. Each author should make every effort to attend the CLRS and present his/her paper.
  • Prize Competition
    A prize fund of $2,500 is available for the best papers submitted in response to the call, and if awarded, prizes will be announced and presented to the authors at the CLRS. Papers will be evaluated by an independent review committee that will judge the papers anonymously.

    • Originality of ideas;
    • Clarity of presentation;
    • Contribution to the literature on reserving; and,
    • Thoroughness of analysis.

  • Submission Guidelines
    Papers must be no more than 10,000 words and should be prepared in accordance with the procedures outlined in the "Guide for Submission to CAS Forum" on the CAS Web Site at www.casact.org/about/index.cfm?fa=forum. Additional guidance for the preparation of technical papers for publication is provided in the "Guides for the Submission of Papers" in the 2003 CAS Yearbook (pages 352-359) and on the CAS Web Site at www.casact.org/about/guides. In addition to a hard copy of the paper, authors will be required to provide an electronic copy of the paper on diskette or by e-mail, and will be asked to sign a "Permission to Publish.htm" form allowing the CAS to publish the paper. Authors are encouraged to submit working templates in spreadsheet form for models or methods discussed or developed in their papers. The spreadsheets will be posted on the CAS Web Site along with the paper.

    It is hoped that authors will also submit their papers for publication in the Proceedings in accordance with the procedures in the Yearbook. However, acceptance of a discussion paper for this call does not guarantee its acceptance for publication in the Proceedings.

    The Committee on Reserves looks forward to receiving proposals in response to the call, and is happy to respond to inquiries from interested parties. Questions may be addressed to Sarah Fore or Jon Michelson at their CAS Yearbook addresses or via e-mail to office@casact.org.