Preliminary Due Diligence of DFA Insurance Company

This paper is a DFA case study of a hypothetical insurance company, DFAIC The study was completed using American Re-lnsurance's proprietary DFA model The company data used was provided in the Call Paper request The study evaluated capital adequacy, capital allocation, and underwriting performance issues Also, strategies regarding asset allocation and reinsurance structures were tested. In keeping with the case study format of the call request, the paper was written as a presentation to management with a cover letter and a technical appendix This format illustrates how recommendations from a DFA analysis can be effectively presented. The presentation highlights the importance of understanding management's success criteria and quantifying man agreement's measure and tolerance of risk. The technical document discusses how limited data can be used to parametenze a DFA model and what additional data would be needed to expand the analysis.