London CARe Seminar: Pricing U.S. Reinsurance in a Softening Market

July 16, 2007
London Underwriting Center
London, England

Session Descriptions

Welcome

Allan Kaufman, FCAS, Honorary FIA, Actuary and Consultant, AMK Consulting

Opening Session

With David Lang, FIA, Managing Director, Limit Underwriting Limited

Actuaries are becoming more important to the running of reinsurance businesses from reserving to pricing to aggregate and capital management. This session will hear from a senior actuary who is now Managing Director of the largest managing agency at Lloyd's. How are actuaries in the UK regarded by senior management? Is this different than how actuaries are regarded in other markets? What roles are actuaries capable of taking on? Which actuarial skills have helped David in his career?

US Property Pricing

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The panelist will review property rating of US exposures. In particular, they will focus on exposure rating using ISO’s PSOLD product, as well as touching on other methods. In addition, advanced exposure based methods for policies involving layering or participation will be analyzed.

The panelists will also cover the treatment of experience rating and the blending of methods. Comparison with non-US methods will be discussed, as well.

Panelists:
Steven B. White, FCAS, Managing Director, Guy Carpenter & Company, LLC
Tony Jordan, BSc (Hons), FIA, FSAI, FNZSA, AIAA, ASA Global Corporate Actuary, Endurance Services Limited

Casualty Pricing Approaches

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The panelists will compare and contrast techniques used in the US to those used in the UK and Europe for experience and exposure rating casualty reinsurance. Typically US cedants provide a greater level of detailed loss and exposure data than reinsureds in other jurisdictions. There are also rating bureaus in the US that make available ILFs and other rating data that is generally not publicly available in other countries. This leads to differences in approaches to pricing US casualty reinsurance.

Panelists:
Douglas H. LaCoss, FCAS, Head of Actuarial Pricing – UK/Ireland, Converium
James Orr, FFA, Tillinghast London
John W. Buchanan, FCAS, Senior Vice President, Platinum Underwriters Reinsurance Inc.

Property Catastrophe

A discussion of property catastrophe pricing issues including data requirements, model interpretation / differences, pricing variables, short-term vs. long-term views, and the current market environment.

Speaker:
Mark Theaker, ARK Syndicate

Pricing D&O - A Global Perspective

The US D&O marketplace seems to be in a constant state of flux. Recent years have seen prices spike hard and then trail off gradually while the number of securities class action suits has dwindled. This session will explore the similarities and differences between US D&O and other countries. We will compare and contrast the US D&O product with the International product with regards to pricing, claims exposure, coverage and the current market environment. We analyze current claims trends in relation to the rate environment to determine whether the current price is at adequate levels despite three continuous years of declining rates. We discuss pros and cons of current pricing models and methodologies used by insurers and we look at common pitfalls of standard reinsurance pricing methods when applied to D&O treaties. We close the discussion by looking ahead and analyzing potential market factors that could turn the D&O market around.

Speaker:
Ana Mata, FCAS, Managing Director, MatBlas Ltd.

Marine & Aviation

An overview of marine and aviation reinsurance from an underwriting and actuarial perspective, focusing on the current market environment, including changes in pricing and terms & conditions.

Speaker:
Lee Tookey, Senior Underwriter, Aspen Re

Workers’ Compensation

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The US workers’ compensation system mixes scheduled wage replacement and unlimited medical reimbursement. This can lead to tremendously large and long lasting claims payments for an individual claim. Largely because of the very long tail and uncertainty surrounding future medical costs, it is very difficult to price the excess portion of claims. This session will discuss the state of the workers’ compensation market, describe the data available to aid in pricing workers’ compensation reinsurance business and explain appropriate pricing methodologies.

Panelists:
Robert G. Blanco, FCAS ,Vice President & Actuary, SCOR Reinsurance
Jose Couret, ACAS, Senior Vice President, Guy Carpenter & Company, LLC

Closing Remarks and Final Questions