Casualty Actuarial Society


Valuation of P&C Insurance Companies, General Survey

  1. Casualty Actuarial Society (CAS)
    The CAS was organized in 1914 as a professional society with the purpose of advancing the body of knowledge of actuarial science applied to property, casualty and similar risk exposures. This is accomplished through communication with the publics affected by insurance, the presentation and discussion of papers, attendance at seminars and workshops, collection of a library, research, and other means. The membership of the CAS includes over 3,500 actuaries employed by insurance companies, industry advisory organizations, national brokers, accounting firms, educational institutions, state insurance departments, the federal government, and independent consultants. Additional information about the CAS can be found at

  2. Committee on Valuation, Finance, and Investments (VFIC)
    The Committee on Valuation, Finance, and Investments (VFIC) is charged with providing direction, guidance, and support to the profession, regulators, and others regarding valuation and financing of property and casualty risks and investments. The Committee is also responsible for monitoring and coordinating activities with other organizations or CAS committees working in areas related to property and casualty valuation, finance, and investments.

  3. CAS Interest in the Subject of Valuation of P&C Insurance Companies
    For purposes of this request, a valuation is defined as an assessment of the value of a property-casualty insurance company. The context of a valuation may be a merger, acquisition, initial public offering, management directive, rating agency review or regulatory examination.

    To date, the cornerstone of the CAS's documented understanding of this topic is the paper "An Investigation of Methods, Assumptions and Risk Modeling for the Valuation of Property/Casualty Insurance Companies" by Robert S. Miccolis, which appeared in the CAS Discussion Paper Program on Financial Analysis of Insurance Companies in May of 1987. This paper is available on the CAS Web Site at Much of that paper was devoted to broad considerations necessary to develop and use valuation models.

    Since then, various researchers have developed tools to implement the ideas in the paper and have expanded upon the underlying theory. While the evidence of this exists in numerous seminars and real-world applications, the CAS literature has not kept up with these developments. Therefore, the CAS wishes to produce a paper that would update and elaborate upon the Miccolis paper.

  4. Request for Proposal
    The VFIC requests proposals from qualified researchers to produce a survey document analyzing and commenting on advances in theoretical understanding and applications in valuating property-casualty insurance companies using the Miccolis paper as a framework. The survey should included relevant articles from Finance and Economics literature in addition to advancements specific to the CAS. The document should include an annotated bibliography of relevant articles.

  5. Proposal Requirements
    Proposals should include a clear outline of the work that will be performed keeping in mind the key dates as shown in the next section.

    The author should be familiar with other papers and presentations on valuations and should be familiar with recent merger, acquisition, major investment or IPO activity in the property-casualty field. A resume (if a firm, of the principal consultant(s) performing or directing the work) showing relevant work/research experience and professional accomplishments (e.g., papers published or presentations) should be included. The author need not be a CAS member.

    The contract will be awarded by the CAS to the respondent who, in the judgment of the VFIC and based entirely on his or her written proposal, is best able to perform the work as specified herein. If the VFIC determines that no proposal meets the requirements of the RFP, then no contract will be awarded.

    Receipt of proposals will be acknowledged by providing each respondent with a list of all respondents. Respondents not awarded the contract will be so informed shortly thereafter.

    Interested researchers should submit their proposals and any questions in writing to:

    Casualty Actuarial Society
    Attention: Chairperson, VFIC
    1100 N. Glebe Road, Suite 600
    Arlington, VA 22201-4798
    Phone: (703) 276-3100
    Fax: (703) 276-3108

    The proposals will be reviewed by a subcommittee of the VFIC. The current membership of VFIC includes:

    Paul J. Brehm, Chair Michael G. McCarter Manalur S. Sandilya
    Michael Belfatti Rasa Varanka McKean Daniel D. Schlemmer
    Karen Davies Claus S. Metzner Christopher M. Suchar
    Richard W. Gorvett Kenneth Quintilian Chester J. Szczepanski
    Aaron Halpert Donald K. Rainey Gary G. Venter
    Alex Krutov Jason L. Russ Robert F. Wolf

  6. Schedule
    February 8, 2002: Deadline for questions (must be written) from researchers regarding the RFP. All written questions together with their answers will be distributed to all proposers.
    March 1, 2002: Proposal deadline - noon EST.
    April 5, 2002: Contract awarded by VFIC
    July 15, 2002: Detailed outline presented to VFIC.
    October 1, 2002: Preliminary draft submitted to VFIC
    October 31, 2002: Paper returned with comments
    December 16, 2002: Final draft due

  7. Compensation
    Compensation of $10,000 will be on the basis of $1,000 of the fee at the time of contract award; $4,000 at the time of completion of a detailed outline; and remaining $5,000 upon acceptance of the report.

  8. Presentation, Ownership and Publication of Report
    The selected researcher(s) will be required to sign the attached consulting agreement, which defines the terms and conditions under which the work is performed.

    If asked, the researcher(s) agree to be available to present the report at a CAS meeting or seminar. If travel is required, reasonable expenses will be paid in addition to the compensation provided in Section 7.

    The CAS intends to copyright the report, post it to the CAS Web Site, and to submit it to the CAS Committee for the Casualty Actuarial Society Forum for consideration as a CAS Forum paper. The author may also wish to submit the paper to the CAS Committee on Review of Papers for consideration of inclusion in the Proceedings of the Casualty Actuarial Society. The Proceedings is the CAS's refereed professional journal. Guidelines for submitting papers for publishing in the CAS Proceedings are as stated on the CAS Web Site at, and in the CAS Yearbook. The time and effort needed for submission and inclusion in the Proceedings is outside the scope of this RFP.

    It is intended that any interested party can use the results of the report freely. The research will be considered work-for-hire and all rights thereto belong to the CAS. However, appropriate credit will be given to the researcher(s).

    Research Agreement