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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.
"Enron-esque" Risk
The highly publicized fall of the Enron Corporation has affected the investment results of numerous companies. It has the potential to affect how U.S. industries report their financial condition and how they structure employee compensation plans, including 401(k) and ESOP plans. Many anticipate that the insurance industry, like most other industries, will need to take a closer look at their own accounting and financial disclosure procedures. Some equity analysts point to announcements of "clean-up reserve strengthening" as being on the list of questionable disclosure practices that need to change. Enron's fall also has the potential to further escalate D&O claim frequency and severity concerns that were already present following the bust of numerous dot-coms. The panel will discuss these issues and other ramifications, and how they may affect a number of businesses and procedures, including D&O insurance, employee compensation plans, accounting and auditing practices, and derivatives used to manage financial risk. The panel will also explore the possible ramifications that tightening standards on reserve opinions and disclosures may have on the actuarial profession.
Source:
2002 Risk and Capital Management Seminar
Type:
concurrent
Moderators:
Ahmad Shadman
Panelists:
Scott Sanderson, Robert Hartwig
Enterprise Risk Management Post 9/11- A Benefit or a Fad?
What are insurance companies actually doing, if anything, to implement enterprise risk management (ERM) for themselves? Do insurance company CEOs support the ERM philosophy? Do they believe it will help them better manage the risks that their company faces, especially in light of September 11? Is ERM a beneficial discipline or is it a fad? Although appealing and gaining acceptance, there are some perceptions in the industry such that purported benefits of ERM are concretely elusive. In this session, a proactive panel and audience discussion will take on the questions above as well as the insurance industry's perception and implementation of ERM in the post-9/11 age. Panelists will share their perspectives, discuss, and debate the practical benefits of ERM and offer viewpoints and counter-points on the state of ERM for insurers today and into the future.
Source:
2002 Risk and Capital Management Seminar
Type:
concurrent
Moderators:
Cara Blank
Panelists:
Scott Sanderson, Susan Witcraft
Enterprise Risk Management- From the CAS Perspective
As the world moves to enterprise risk management (ERM), how well are the Casualty Actuarial Society and its individual members positioned to play meaningful, perhaps leadership, roles in the insurance industry and beyond? Over the past two years, the Casualty Actuarial Society has systematically explored what the ERM movement means for its members—in particular, what knowledge and skill gaps need to be filled and by what means. Two members of the CAS Enterprise Risk Management Committee will discuss ERM from the CAS point of view, and what the implications are for us and our profession going forward.
Source:
2002 Risk and Capital Management Seminar
Type:
concurrent
Panelists:
John Kollar, Jerry Miccolis
Architects & Engineers Liability
Underwriting and pricing considerations for architects and engineers liability production are the focus of this session. Past, current, and expected future market conditions and trends will be discussed.
Source:
2002 CARe LAS - Directors & Officers and Errors & Omissions Professional Liability
Type:
concurrent
Moderators:
Steven Petlick
Panelists:
Raymond Bustamante
Keywords:
Underwriting and pricing considerations
Two Approaches to Calculating Correlated Reserve Indications
As reserving actuaries focus more on reserve ranges and less on point estimates, the question of how to develop a reasonable reserve range in the aggregate becomes more and more relevant. When working with a single set of "best estimates", the answer is simple - assuming all the best estimates are the mean values for each block of business being analyzed, the best estimate for the total is equal to the sum of the parts. However, if the by line best estimates are other than the mean values, the sum of the parts is not the same as the best estimate for the aggregate.
This paper presents two possible approaches to developing aggregate reserve indications when looking at results other than the mean value. The approaches both rely on a simulation model. One takes in the actuary's judgment as to the correlations between the different underlying blocks of business and the second uses bootstrapping to eliminate the need for the actuary to make judgment calls about the nature of the correlations.
Source:
2002 Casualty Loss Reserve Seminar (CLRS)
Type:
Paper
Asbestos and Environmental Reserves Increases and Shareholder Wealth
Between 1992 and 2000, several major property/liability insurers announced significant reserves increases for the purpose of funding expected asbestos and environmental liability. Most analysts agree that U.S. insurers are underreserved for asbestos and environmental liability but how the market reacts to an insurer's announcement of an increase in these reserves has not been analyzed. The market is likely to view an underreserved insurer as significantly lacking in long-term financial stability. However, when a company increases its reserves there is a charge to income and a reduction in capital. If surplus is diminished sufficiently as a result of the increased reserving, regulatory attention and eroding shareholder and market confidence could also result. This study estimates and documents the market's reaction to reserves increase announcements between 1992 and 2000, and evaluates the reasons for this reaction. Market data for both announcing and non-announcing insurers with potential environmental exposure provides a useful paradigm for identifying the most likely explanation for the market's reaction to these announcements. Reviewing reserves increase announcements from 1992 to 1995, most insurers announcing large increases in asbestos and environmental reserves experienced stock price significant reductions in the days surrounding the announcement. During 1996 to 2000, when additional disclosures of A & E payments and reserves were required of insurers, many of the announcing insurers saw little impact on their stock prices. Some evidence suggests that the additional required accounting disclosures provided valuable valuation information to the market. With the exception of the largest announcement, the stock price reaction is isolated to the announcing firm, indicating that the announcement by one firm does not affect the market's assessment of the entire industry.
Source:
2002 Casualty Loss Reserve Seminar (CLRS)
Type:
Paper
Keywords:
Reserves
Correlation and the Aggregation of Unpaid Loss Distributions
Significant progress has been made in the last decade in developing models to describe the distribution of unpaid losses for a line of insurance. Line-by-line distributions must be aggregated, however, in order to address company-wide issues, such as enterprise risk, capital requirements, fair value, and more.
Using U.S. industry commercial lines data, this paper uses Zehnwirth's method to produce distributions of unpaid losses by line of insurance and Wang's standard normal copula method of aggregating correlated risk portfolios to create aggregate distributions of unpaid losses. In doing so, a methodology for direct estimation of correlations between lines is proposed.
Source:
2002 Casualty Loss Reserve Seminar (CLRS)
Type:
Paper
Keywords:
Aggregation of Unpaid Loss Distributions
Reserving for Runoff Operations-A Real Life Claims Specific Methodology for Reserving a Workers Compensation Runoff Entity
The paper takes the reader through a real life example of an entity in runoff. In some instances, certain calculations and data examples have been amended from their original forms for the purposes of simplicity and demonstration.
The runoff operation's reserves are predominately those of Florida Workers Compensation (WC) self-insured funds. WC has its own unique properties, which need to be considered when reserving in a runoff environment.
Two observations in particular have been seen within the data: (1) occasional spikes in the Workers Compensation data as a result of settlement activity, (2) extraordinary ALAE costs incurred during the years following the 1994 Tort Reforms. The changes to both the type of remaining claimants as well as the Workers Compensation environment may produce distortions to loss development triangles using so called "traditional" reserving methodologies.
Source:
2002 Casualty Loss Reserve Seminar (CLRS)
Type:
Paper
Management's Best Estimate of Loss Reserves
An economically rational way for management to set reserve estimates is to utilize the future change in the value of the company as a statistical decision function and then to choose the reserve estimate so as to minimize the average value of this function. The mean of the reserve distribution is almost surely too low as an outcome.
Source:
2002 Casualty Loss Reserve Seminar (CLRS)
Type:
Paper
Keywords:
Best Estimate of Loss Reserves
Materiality and Statements of Actuarial Opinion
How should practicing actuaries consider materiality in the context of formal Statements of Actuarial Opinion? The specific issue of materiality has come to the forefront for casualty actuaries recently with the requirements of Actuarial Standard of Practice (ASOP) 36.
The Actuarial Standards Board Casualty Committee's Subcommittee on Reserves was involved in drafting ASOP 36. After its third draft, the Subcommittee held a hearing on the proposed standard. There were many controversial issues expressed at the hearing, especially those involving materiality. While the Subcommittee admitted that a standard of practice on the topic of materiality itself was perhaps a good idea, the implementation of ASOP 36 went forward, despite pointed opposition by many actuaries.
This paper will address materiality from external points of view (i.e., U.S. Supreme Court, Securities and Exchange Commission, Financial Accounting Standards Board), then present findings from research on materiality standards commonly used by both the actuarial and regulatory communities. Next, we present a framework for determining materiality thresholds in the context of the Statement of Actuarial Opinion for practicing actuaries ranging from the very simple (rules of thumb) to the more complex (stochastic modeling).
This paper presumes the reader is well versed in the requirements of ASOP 36 and has a good working knowledge of the requirements for Statements of Actuarial Opinion promulgated by the National Association of Insurance Commissioners (NAIC).
Source:
2002 Casualty Loss Reserve Seminar (CLRS)
Type:
Paper
Keywords:
Statements of Actuarial Opinion
Considerations Regarding Materiality and Range of Reserves In Connection With Actuarial Standard of Practice #36
The Actuarial Standard of Practice No. 36 has highlighted several issues that have been implicitly considered by property/casualty actuaries for years. For the first time, the types of statements of actuarial opinion have been standardized and listed for categorization by property/casualty actuaries. However, many other areas with which the actuary needs to be familiar are not documented in standard actuarial literature. This paper examines the interrelationship of materiality and range of reasonable reserves. Some common rules of thumb are formulated in regards to the range of reasonable reserve estimates. The paper references accounting literature, such as the American Institute of Certified Public Accountants Professional Standards and the Security Exchange Commission Staff Accounting Bulletins, in order to provide the actuary some reference materials while issuing opinions. In addition, some practical considerations regarding necessary work steps needed to issue a statement of actuarial opinion are outlined.
Source:
2002 Casualty Loss Reserve Seminar (CLRS)
Type:
Paper
Keywords:
Actuarial Standard of Practice #36
FAS 113: Accounting Rule Guidance for Actuaries on Risk Transfer Testing
FAS 113 requires a reinsurance contract transfer risk in order to garner reinsurance accounting treatment. Because of the diversity and complexity of reinsurance deals, FAS 113 appropriately does not provide specific guidance on risk transfer testing methodology. Furthermore, there is little supporting literature. The Valuation, Finance, and Investment Committee (VFIC), a CAS research committee was asked, by CAS membership request, to investigate and provide guidance to actuaries regarding risk transfer testing for reinsurance contracts set forth in FAS 113.
This session will present VFIC's analysis and guidance. Topics covered will include an overview of FAS 113 and related statements, discussion of current risk transfer testing practices and key considerations, and, as an alternative, the use of coherent risk measures in judging risk transfer.
Source:
2002 Casualty Loss Reserve Seminar (CLRS)
Type:
concurrent
Panelists:
Paul Brehm, Gary Venter
Keywords:
Risk Transfer Testing, Accounting Rule Guidance, FAS 113
Finite Reinsurance
Pricing and reserving for finite reinsurance typically involves modeling the terms of each contract under a range of probabilistic or deterministic scenarios. This panel will explore two perspectives on finite reinsurance. An actuary responsible for finite reinsurance reserving will discuss various types of models used and the reserving and accounting issues involved. The panelists will outline a specific approach to pricing and reserving for adverse development covers based on probabilistic models.
Source:
2002 Casualty Loss Reserve Seminar (CLRS)
Type:
concurrent
Moderators:
Aaron Halpert
Panelists:
Alan Speert, Glen Barnett
Keywords:
Finite Reinsurance
Introduction to Reinsurance Reserving
While reinsurance reserving principles are generally similar to primary reserving, their application is often more difficult and involves special considerations. This session provides a basic understanding of loss reserving principals, considerations, and techniques as applied to assumed reinsurance.
The panelists will cover reinsurance contract types, grouping of data for loss development, specific reserving techniques, and complications in their application.
Not intended for experienced reinsurance actuaries but assumes a working knowledge of primary reserving techniques. No advance preparation is required.
Source:
2002 Casualty Loss Reserve Seminar (CLRS)
Type:
concurrent
Panelists:
Michael Angelina, Christopher Bozman, Bruce Fell
Keywords:
Reinsurance Reserving
Regression Models and Loss Reserving
This session will provide an overview of stochastic claims reserving, highlight the benefits of a stochastic approach, and explore some of the current models. Panelists will consider the Bornheutter-Ferguson technique as a stochastic model within a Bayesian framework. It will look at how to use data to test different reserve models within a regression framework.
Source:
2002 Casualty Loss Reserve Seminar (CLRS)
Type:
concurrent
Moderators:
Aaron Halpert
Panelists:
Gary Venter, Andrew English
Keywords:
Regression Models and Loss Reserving
Determining Reserve Ranges and the Variability of Loss Reserves
Often a high degree of variability exists in loss and loss adjustment expense reserve estimates, particularly with excess of loss reinsurance or long-tailed primary lines of business. Estimates may be as simple as a set of discrete values for low, best, and high estimates, or they may involve a complex family of loss distributions. Estimates that include the determination of the level of confidence an actuary places in a particular reserve level have received increased scrutiny by both regulatory authorities and rating agencies. This panel addresses some common techniques used to analyze the variability of reserves and their underlying assumptions, and hence, validity. Current financial statements require a single liability number and not the distribution of liabilities. This panel will also consider the issue of booking a single number and ways to address risks faced by insurers from regulators, market analysts, and insureds in selecting that single liability number.
Source:
2002 Casualty Loss Reserve Seminar (CLRS)
Type:
concurrent
Moderators:
Allan Neis
Panelists:
Rodney Kreps
Keywords:
Determining Reserve Ranges, Variability of Loss Reserves
Actuaries Supporting the Financial Audit
Actuaries employed by accounting firms often serve as key participants of the team conducting a financial audit of an insurance company. In this capacity, they are often asked to review the reasonableness of the recorded reserves, a role common to most reserving actuaries. However, the auditor-actuary relationship also exposes actuaries to a variety of special issues in today's post-Enron environment.
This session will focus on a number of these issues such as the responsibility of the actuary to the audit team, the balance sheet items an actuary is often asked to review, and the evolving issue of auditor independence and how this affects the actuary's services to the client. The session will also focus on opportunities for expanding the role of the actuary within the context of a financial audit.
Source:
2002 Casualty Loss Reserve Seminar (CLRS)
Type:
concurrent
Moderators:
Scott Weinstein
Panelists:
Michael Grillaert, Jan Lommele, Terrence O'Brien
Keywords:
Financial, reserving
Closing the Books-Approaches to Determine Carried Reserves
Much of actuarial work centers on determining the required loss reserves, which is then compared to booked reserves to assess adequacy. Booked reserves are established through the financial closing process which is generally done within a short time frame at the end of the accounting period (usually month-end). Because of the limited time available to close the books, various formulas and ad hoc procedures are used to determine booked reserves. This session will present some of the methods used to close the books.
Source:
2002 Casualty Loss Reserve Seminar (CLRS)
Type:
concurrent
Moderators:
Chad Wischmeyer
Panelists:
Joseph Marker, Thomas Moylan, Adam Hartman
Keywords:
Reserves, reserves to assess adequacy, loss reserves
Income Tax Considerations-Loss Reserves
For most insurance companies, loss reserves are typically a major factor in determining the company's tax liability. This session will discuss various loss reserve issues, standards, and court cases that are important from an income tax perspective including: Actuarial Standards of Practice, Statutory Accounting Principles, the Securities and Exchange Commission, the Treasury Regulations, and various tax cases. The panel will include an actuary, tax attorney, and a representative from the IRS. Each party will comment on the importance of the various documents in a tax return.
Source:
2002 Casualty Loss Reserve Seminar (CLRS)
Type:
concurrent
Moderators:
Mark Sobel
Panelists:
Joseph Long, Richard Bromley
Keywords:
Loss Reserves, Income Tax Considerations
Fair Value Accounting and Actuaries in the Post-Enron World
Proposals to reform accounting rules have received a lot of attention from accounting standards organizations in recent years. Following Enron, these proposals received increased visibility. Many of the proposals would dramatically alter how insurance accounting is done. This session will discuss fair value accounting and its implications for the actuarial profession.
The session will begin with a definition of the term "fair value," and will present a summary of initiatives undertaken by various standard-setting bodies. Topics discussed will include alternatives to fair value, implementation issues, presentation issues (for example, what would an income statement look like under fair value accounting), and a critique as to the value of fair value financial statements. The discussion will include a dialogue as to the actuarial profession's readiness to implement such a system, and what may be needed to prepare the profession for a fair value world. The session will then present an introduction to procedures actuaries may consider for estimating the fair value of liabilities.
Source:
2002 Casualty Loss Reserve Seminar (CLRS)
Type:
concurrent
Moderators:
Mark Sobel
Panelists:
Louise Francis, Michael Grillaert
Keywords:
Fair Value Accounting
Captive Insurance Companies
The recent hard market has led a resurgence in the formation of new captives over the past several years. This session will focus on two perspectives: those of a captive manager and a reserving actuary for a captive insurance company. The captive manager will review reasons for captive formation and accounting requirement considerations, and will present some broad industry statistics. The reserving actuary will compare reserving requirements in some of the larger domiciles, data sources, actuarial methodologies, discounting issues, and examples of typical actuarial interactions with the captive manager in connection with reserve reviews.
Source:
2002 Casualty Loss Reserve Seminar (CLRS)
Type:
concurrent
Moderators:
Layne Onufer
Panelists:
George Levine, Bob Gagliardi
Keywords:
Captive Insurance Companies
Alternative Risk Markets
This session will explore recent alternative market approaches to meeting risk financing needs in a hardening market with reduced capacity. Panelists will present their perspectives on these issues with regard to captive insurance companies, risk retention groups, risk pools, and capital markets. They will emphasize innovations in the nontraditional market towards meeting industry needs. Panelists will be drawn from an alternative markets management company, an alternative markets regulator, and a capital markets specialist.
Source:
2002 Casualty Loss Reserve Seminar (CLRS)
Type:
concurrent
Moderators:
Peter Royek
Panelists:
Andrew Sargeant, Clayton Ingram, Chi Hum
Keywords:
Alternative Risk Markets, risk financing
Broadening the Audience-Actuarial Interaction With Chief Financial Officers
Observing how actuaries and chief financial officers (CFOs) interact, identifying what types of reserving information are useful to financial officers, and determining the best way to present this information are the subjects of this session. The various constituents served by the CFO will be identified along with why and how actuarial information is used to perform the CFO role. Examples of projects and the related constituents in which the counsel of the reserving actuary is sought will also be presented.
Exploring the relationship between the pricing and reserving actuary, the panel will also consider how pricing and reserving actuaries work together and reconcile their points of view for purposes of planning and forecasting.
Source:
2002 Casualty Loss Reserve Seminar (CLRS)
Type:
concurrent
Moderators:
Raji Bhagavatula
Panelists:
Howard Dempster, Andrew Kudera, Randall Buhlig
Keywords:
Financial, chief financial officers (CFOs)
International Reserving Issues
With the insurance industry becoming more global in nature, the importance of international issues has significantly increased. This panel will introduce the considerations and concerns involved in reserving in countries other than the U.S. and Canada.
Specific topics include local accounting rules and their effects on the reserving process, data availability, industry benchmarks, and the Lloyd's market. Primary emphasis will be on reserving in the United Kingdom, Japan, Argentina, Brazil, and Mexico. No advance preparation is required.
Source:
2002 Casualty Loss Reserve Seminar (CLRS)
Type:
concurrent
Moderators:
Michael Larrick
Panelists:
Paul Gates, Eduardo Esteva
Keywords:
International Reserving Issues
New Perspectives on Asbestos
Insurance companies face many challenges in estimating asbestos reserves. Panelists will discuss the general methods that can be used to estimate asbestos reserves and the limitations associated with the methods in light of recent trends.
Source:
2002 Casualty Loss Reserve Seminar (CLRS)
Type:
concurrent
Moderators:
Kay Cleary
Panelists:
Gail Ross, Jason Russ, Jon Collins
Keywords:
Asbestos
