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STAY TUNED! If you are anticipating additional search filters by attribute and level to align with the CAS Capability Model, it is coming later this Summer. As the CAS begins to code recorded sessions by specific attributes and levels (starting with the 2023 Annual Meeting), these will be tagged in the CAS database of presentations going forward and should be searchable.
But you may use the Capability Model now to help you identify topics. For example, if you want to move up one level under the content area “Functional Expertise,” you may search topics in the particular functional area to expand your knowledge.
Recorded content is searchable by Capability Model attribute and level in the CAS Online Library.
Florida Property Issues
While the Florida Hurricane Catastrophe Fund has been studying several difficult issues in preparation for the 2003 legislative session, Florida's property residual market pools were merged into a new entity called Citizens Property Insurance Corporation on July 1, 2002. This session will address important changes taking place in the government entities operating in the Florida property insurance market and how those changes will affect insurers and their actuaries.
Source:
2002 Annual Meeting
Type:
concurrent
Moderators:
James Santo
Panelists:
Larry Johnson, Tony Loughman
Keywords:
Hurricane Catastrophe, property insurance market
Exposure Accumulations-Measuring and Managing Aggregations
Recent events have enhanced our awareness of potentially catastrophic losses. This has led to a need for insurance companies to monitor their exposure accumulations by geographic location, line of business, and specific insured. Such considerations have significant implications for the underwriting and pricing of risks, both individually and as components of an overall insurance portfolio.
This session examines methods of monitoring such exposure aggregations, and discusses ways that insurers can manage this issue. Included will be a discussion of how limited capacity might be allocated among strategic business units within a firm.
Source:
2002 Annual Meeting
Type:
concurrent
Moderators:
Thomas Conway
Panelists:
Christopher Gross, Bill Tuttle
Keywords:
catastrophic losses, line of business, exposure aggregations
Data Mining
Data mining is a new and evolving discipline that uses advanced technologies to find patterns in data. This session will discuss what data mining is and some of the popular methods used. The panel will present some potential actuarial data mining applications like credit scoring, underwriting, loss development, and modeling financial markets. Developed procedures such as bagging and boosting for combining the results of multiple methods will be discussed. Time permitting, the panelists will also discuss the inner workings of neural networks, one of the more commonly used data mining methods.
Source:
2002 Annual Meeting
Type:
concurrent
Moderators:
Cheng-Sheng Wu
Panelists:
Louise Francis, Stijn Viaene
Keywords:
Data mining, actuarial data mining applications, credit scoring, underwriting, loss development, and modeling financial markets
Current and Potential Use of Generalized Linear Models
Generalized linear models (GLMs) have been widely accepted and used extensively in the U.K. for years. While the use of GLMs have been relatively limited in the U.S. property/casualty insurance industry, using GLM techniques for standard actuarial applications is rapidly increasing. In fact, multivariate analysis is even being required in at least one location for certain applications.
This panel will address GLMs from several different angles. First, the panel will compare and contrast GLMs with standard actuarial techniques to provide a better understanding of the benefits and limitations of GLM. Second, whereas in the U.S. GLM tools have been primarily used for relativity analysis, the panel will discuss GLMs to a wide variety of business decisions. Finally, the panel will discuss applying the regulatory acceptance of GLM and GLM models for property/casualty ratemaking.
Source:
2002 Annual Meeting
Type:
concurrent
Moderators:
Roosevelt Mosely
Panelists:
Keith Holler, Chester Szczepanski, Claudine Modlin
Keywords:
Generalized linear models, GLM techniques
The Condition of the Professional Liability Market
High costs for professional liability losses are causing numerous problems for insureds, reinsurers, and primary companies. These problems include unavailable coverage, inadequate rate increases, ineffective exposure management, and difficulty in acquiring quality reinsurance, which have placed the professional liability insurance market in a state of distress.
The panel will analyze the reasons for large loss trends and poor experience and will address ways to handle these problems. The lines of businesses to be discussed include accounting, law, architecture, engineering, and insurance.
Source:
2002 Annual Meeting
Type:
concurrent
Moderators:
Richard Castillo
Panelists:
Denise Olson, Brian Turner
Keywords:
professional liability losses, insureds, reinsurers, and primary companies, loss trends and poor experience, exposure management
Collateralization of Deductibles/SIRs
The reduction in the capacity of the insurance industry, coupled with concerns related to Enron and the general economy, have had a significant impact on corporations needing to collateralize deductibles and self-insured retentions (SIRs). The level of collateral required has seen substantial upward pressure at the same time that surety bond rates and the cost of letters of credit are increasing. There is also a seemingly lower appetite within the commercial insurance market to write commercial, as opposed to contractor, surety bonds. Our panelists will discuss this growing problem from different perspectives, including the general considerations in assessing the underlying risk; recent experiences with the surety market, particularly some of the more interesting Enron "deals;" and an innovative solution being considered by a self-insured workers compensation guaranty fund in a major state.
Source:
2002 Annual Meeting
Type:
concurrent
Moderators:
Nolan Asch
Panelists:
Rick Meyerholz, Quentin Hills, Drew Brach
Keywords:
collateralize deductibles, commercial insurance
Capital Adequacy
Before September 11, mainstream researchers generally viewed the property/casualty industry as overcapitalized. Considering the events of September, the evidence of loss reserve shortfalls, continued estimates of environmental and asbestos claims, the increased exposure due to the subsequent fallout from the Enron crises, and recent insolvencies, is the industry still deemed overcapitalized? Panelists will discuss whether the industry can reasonably sustain another 2001 and if the basic capital adequacy measures (leverage ratios and risk-based capital) are working. The panel will discuss the broad topic of capital adequacy for property/casualty insurance companies with regard to these various issues and whether perceptions differ from investors and senior financial executives in the industry.
Source:
2002 Annual Meeting
Type:
concurrent
Moderators:
John Herzfeld
Panelists:
Todd Bault, Mark Callahan, Sarah Hibler
Keywords:
property/casualty industry, environmental and asbestos claims, loss reserve shortfalls, overcapitalized
Shareholder Value: Truth or Consequences?
The Enron/Arthur Andersen debacle raises new questions about the various accounting approaches that companies use. Pseudosubsidiaries, stock-option treatment, asset-sale profits applied to reduce expenses, and other creative accounting practices have placed not only specific accounting practices under various regulatory scrutinies, but they have raised larger societal questions about financial statements and disclosure to the public. A common thread in many of these "adventures" has been enterprise management's devotion to increasing shareholder value. There have been instances of organizations claiming that shareholder value is the raison d'être.
This panel will explore the implications of this focus on shareholder value for property/casualty insurers both in the U.S. and Europe. Panelists will compare the shareholder value focus with the more traditional emphasis on long-term financial solidity and the duty to shareholders versus that to policyholders. How creative accounting approaches might affect an entity's reserving and what DFA tools could help identify questionable approaches, and the like, will also be explored. The panel will also examine how the issue of shareholder value affects insurance companies outside of the U.S. who have traditionally focused on long-term objectives.
Source:
2002 Annual Meeting
Type:
general
Moderators:
Jeanne Hollister
Panelists:
Todd Bault, Catherine Cresswell
Keywords:
Pseudosubsidiaries, stock-option treatment, asset-sale profits applied to reduce expenses, and other creative accounting practices
Operating in a Post-Enron World: Implications for Property/Casualty Insurance Companies
The Enron insolvency has raised awareness with shareholders, regulators, and employees on the importance of presenting financial statements that are accurate and consistent with financial accounting standards.
For property/casualty insurance companies, loss and loss adjustment expense reserves represent one of the major items on the balance sheet. They can be estimated with different techniques and are subject to significant uncertainty. How are companies addressing this issue? How important is independence? Are the board of directors asking the right questions? Is Wall Street properly informed? Beyond the issue of reserve estimation, are there broader implications for the corporate governance of property/casualty insurance entities that companies should be addressing?
This panel will explore the issues surrounding auditor independence and corporate governance and present ideas on how the industry can improve the level of acceptance in the financial statements as they are presented to the public.
Source:
2002 Annual Meeting
Type:
general
Moderators:
Jeanne Hollister
Panelists:
W. MacGinnitie, Vincent Dowling, Jerry St. Paer
Keywords:
financial statements, financial accounting standards, property/casualty insurance companies, loss and loss adjustment expense reserves
Hedging catastrophe risks using index-based instruments
This seminar will focus on various aspects of catastrophe risk management and pricing.
Source:
2002 CARe LAS - Catastrophe Pricing and Risk Management
Type:
concurrent
Panelists:
Richard Anderson, Jonathan Hayes, Peter Martin, Lixin Zeng, Laurie Johnson
Keywords:
catastrophe risk management and pricing
Communicating With Wall Street
Recent events in the capital markets have highlighted and elevated the importance of the type and quality of information that companies share with their investors. More and more, companies are called upon to clarify their financial results and to increase the transparency of their communications. The issue will be presented from two perspectives. First, a major insurer will discuss how they have addressed the issue as a provider of this financial information. Second, we will get the perspective of a Wall Street research analyst, who must interpret reported financial information and make recommendations based on it.
Source:
2002 Risk and Capital Management Seminar
Type:
concurrent
Moderators:
Kevin Madigan
Panelists:
Todd Bault, Stephen Peterson
Capital Allocation
Capital allocation always seems to generate strong opinions in our industry. What is the best way to do it? Can it be done at all? Should it be done at all? In this session, panelists will explore the financial underpinnings of why capital allocation is important to all firms, and discuss several approaches to accomplish this seemingly difficult task.
Source:
2002 Risk and Capital Management Seminar
Type:
concurrent
Moderators:
Gayle Haskell
Panelists:
Donald Mango, Glenn Meyers, Joan Lamm-Tennant
Management of Asset Risk- Part 2
Given the background provided in Part 1, the panel will discuss how a corporation should approach integrating its business strategy with its investment strategy to manage its investment risks optimally. The discussion will include how investment strategies can be used to augment a business strategy, how some investment risk management tools can create risks in their own right, and how this integration may be affected by increasing scrutiny on investment procedures and disclosures.
Source:
2002 Risk and Capital Management Seminar
Type:
concurrent
Panelists:
Raghu Ramachandran, Gary Venter
Management of Asset Risk- Part 1
Life insurance companies, banks, property/casualty companies, and other financial services companies use many different tools to manage their investment risks, which include the underlying market and credit risks. The session will explore the advantages and disadvantages of different types of approaches, including derivatives and more traditional financial instruments, such as equity-vs.-bond portfolio allocations. The discussion will also focus on what business risks can be reasonably addressed through hedging and other tools, and which risks are less amenable to such an approach.
Source:
2002 Risk and Capital Management Seminar
Type:
concurrent
Panelists:
Raghu Ramachandran, Gary Venter, Chris Madsen
Cost of Capital Update
Recent academic research addresses two important aspects regarding the costs of equity capital for insurers. Dr. Richard Derrig will present final results from the Risk Premium Project (RPP) on estimating the cost of equity capital by line of insurance. Sponsored by the CAS Committee on the Theory of Risk, the RPP researchers estimated full information equity betas, with autocorrelation adjustments, for property-liability insurers in a manner similar to Kaplan and Peterson (1997). The full information approach, which assumes that the systematic risk of a firm is a weighted average division of the firm, has gained widespread attention as a market-based approach that allows one to estimate industry-specific costs of capital—without eliminating conglomerate firms with operations in multiple industries from the analysis. By extending the full information approach, the RPP researchers are able to estimate whether significant differences exist in the cost of equity capital across different lines of insurance.
Dr. George Zanjani will present his paper, which addresses equilibrium pricing and capital allocation in a multi-line insurance company when solvency matters to consumers, capital is costly to hold, and the average loss is uncertain. Price differences across lines are traced to differences in capital required at the margin to maintain solvency. Theoretical differences and similarities between the Zanjani and Myers and Read models will be highlighted.
Source:
2002 Risk and Capital Management Seminar
Type:
concurrent
Panelists:
Richard Derrig, George Zanjani
RAROC and Value-at-Risk Applications
This session will discuss how Value-at-Risk (VaR) works and how it is used to measure financial performance, allocate capital, assess risk-adjusted returns (RAROC), and make restructuring and strategic decisions. The discussion will emphasize the approaches developed in the banking industry and adapting them for the analysis of property/casualty insurance companies. Panelists will present case studies to illustrate the use of the VaR and RAROC concepts to measure all risks across an insurance enterprise and develop a framework for management decisions.
Source:
2002 Risk and Capital Management Seminar
Type:
concurrent
Panelists:
Peter Nakada, Wai-Keung Tang
Make Your Actuarial Spreadsheets Fly
This session shows programming details needed to tune your spreadsheets to measure and gauge risk. It debunks the myth that spreadsheet solutions are too slow or trivialized to handle serious problems of risk measurement. This session sets aside theoretical niceties of DFA design; instead, it illustrates practical implementation of spreadsheet-centric solutions for risk measurement. The intent is two-fold:
~ Show programming tricks that greatly aid the performance of Excel solutions, and
~ Illustrate their use for complex risk transfer analysis and pricing.
Source:
2002 Risk and Capital Management Seminar
Type:
concurrent
Moderators:
Dale Ogden
Panelists:
William Scheel
Policyholder Retention and Its Impact on Pricing
The policyholder retention and its impact on profitability have long been overlooked in actuarial literature. As insurance draws closer to other financial services industries, the emphasis those markets place on retention, lifetime customer value, and the economic value of the current client base are getting increased attention.
This session will present possible measures of retention, a discussion of how different market segments may respond to rate changes, an approach to modeling prospective retentions by market segment, and how this information can be used to optimize a proposed rate change.
Source:
2002 Risk and Capital Management Seminar
Type:
concurrent
Moderators:
Bertram Horowitz
Panelists:
Claudine Modlin, Charles Boucek
Rating Agency Perspectives
DFA is becoming an increasingly important risk management and capital optimization tool for insurance companies to evaluate decisions, such as finding the optimal reinsurance program and determining financial planning. DFA analyses can also enhance asset portfolio and strategic planning decisions. Given that a company sees value in using DFA internally to evaluate corporate initiatives and capital adequacy, a key question is the degree to which rating agencies are interested in DFA for their external valuation purposes. Can internal DFA studies be used by the company to garner an upgrade or stave off a downgrade? Can DFA models be used in meetings with rating agencies to support strategic or tactical changes in a company's business plan, or to support how the company evaluates and manages risk? The panelists will address these and related questions. The panelists will also discuss the role that DFA and similar quantitative models play in their rating process.
Source:
2002 Risk and Capital Management Seminar
Type:
concurrent
Panelists:
Thomas Mount
DFA Implementation Issues
Management does not wake up one morning and say, "We will implement DFA." The decision to implement DFA usually involves input from every corner of the company, after careful consideration of the intended purpose and the many issues that must be addressed. In this session, the panelists will discuss some unique and unforeseen obstacles that their companies faced in the implementation process, and whether these obstacles were successfully addressed. The panelists will also discuss alternative courses of action and decisions that would have enhanced the success of the DFA implementation project.
Source:
2002 Risk and Capital Management Seminar
Type:
concurrent
Panelists:
Gerald Kirschner, Jennifer Ehrenfeld
Accountants Professional Liability
With the downfall of Arthur Andersen due to its association with the Enron fiasco, accountants and their professional practices have come into the spotlight. Our country's economy and most of our own personal portfolios rely on the knowledge and skills of these professionals. Will increased scrutiny and examination of the numbers' paper trail set off a series of litigation or have firms established key checkpoints to safeguard their reputations? During this session various issues associated with accountants' errors and omissions coverage will be discussed.
Source:
2002 CARe LAS - Directors & Officers and Errors & Omissions Professional Liability
Type:
concurrent
Moderators:
Steven Petlick
Panelists:
Joseph Kirley, Gregory Leffard
Keywords:
issues associated with accountants' errors and omissions
Asset Liability and Investment Policy/Duration Matching
The CAS Valuations, Finance, and Investments Committee (VFIC) has recently completed a paper that represents an interesting application of DFA to the evaluation of the duration of property/casualty insurance company liabilities. In this paper VFIC presents the results of its research to date into the value of duration matching as a risk-optimizing strategy for insurer assets. The Committee found that the evidence supporting duration matching was ambiguous at best, and under most scenarios represented a traditional trade-off between risk and return.
Source:
2002 Risk and Capital Management Seminar
Type:
concurrent
Moderators:
Bertram Horowitz
Panelists:
Kenneth Quintilian, Daniel Isaac, Chris Suchar
Risk Integration, Aggregation, and Correlation
One of the critical parts of the enterprise risk management process is the quantification of risk. However, it is not enough to develop probability distribution on individual risk sources. The cost of managing risks separately can be far greater than doing so in an aggregate basis. In other words, a benefit of managing risks on an enterprise basis is being able to take advantage of natural hedges and to reflect explicitly the correlation among risks. This session will discuss the challenges of integrating multiple risk measures from technical and operational perspectives.
Source:
2002 Risk and Capital Management Seminar
Type:
concurrent
Moderators:
Bertram Horowitz
Panelists:
Robert Wolf, Kevin Dickson
Disability Management Strategies: Lessons Learned From Managed Health Care and Workers Compensation
The most expensive thing an employer does is pay employees not to work! When an employee is disabled, the associated costs approach 15 percent of payroll. The costs are both direct and indirect. Indirect costs include such items as lost productivity, retraining, overtime pay, and temporary workers. Other intangible costs have been estimated to be in excess of another five percent because of reduced quality, decrease in customer satisfaction, and worker burnout leading to turnover. This means that one-fifth of an average employer's payroll is going to people who aren't working. Integrated disability management programs focus on restoring the health status of disabled employees and returning them to productivity. The advent of managed health care in the 1980's and the older workers compensation model provide valuable lessons on how to get people back into a productive work life. This presentation will address how to achieve both human resource and financial objectives, reduce disability related costs, help employees experience better health outcomes and improved quality of life, and enhance employees' perceptions of their organizations as "employee friendly."
Source:
2002 Risk and Capital Management Seminar
Type:
concurrent
Panelists:
Jeffrey Jordt, Steve Cyboran
Operational Risk-Managing and Measuring
The panel will discuss how companies in various industries are seeking better ways to manage operational risks such as pricing, trading, cash movement errors, and fraud. The discussion will touch on the evolution of risk management and the development of the CRO (Chief Risk Officer) role. The discussion will describe the steps that companies are taking to develop risk profiles, assess and evaluate risks, define risk thresholds, and establish systems for quantifying and managing operational risks within the companies' risk tolerance thresholds.
Source:
2002 Risk and Capital Management Seminar
Type:
concurrent
Panelists:
Barry Franklin, Samir Shah, Mark Charron
