care seminar executive session m. grandisson june 6, 2005...
TRANSCRIPT
CARe SeminarExecutive Session
M. Grandisson
June 6, 2005
\\Arlbmdc01\Common\Actuarial\CAReSeminarJune6.ppt
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Strategies for maximizing profits through cycle
A. Underwriting cycles will always be a part of our industry
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Strategies for maximizing profits through cycle
B. The best strategy to maximize profit through the cycle is to expand into other lines of business
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Strategies for maximizing profits through cycle
C. The best strategy to maximize profit through the cycle is to shift the mix of business between XOL and Quota Share
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Strategies for maximizing profits through cycle
D. The best strategy to maximize profit through the cycle is to be willing to increase and decrease the amount of business written any given year
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Management'sDirection
Actuaries'Mis-Pricing /
Mis-Reserving
Broker Wall StreetExpectations
Herd Mentality Other
Strategies for maximizing profits through cycle
E. The leading cause that explains underwriting cycles is:
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Strategies for maximizing profits through cycle
E. The leading cause that explains underwriting cycles is:
Other causes that explain underwriting cycles
• Capitalization / Capacity imbalance
• Uncertainty of true cost
• Long tail nature of business
• Quality of information
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Role of the actuary
A. Actuaries can play a stabilizing role through the underwriting cycle
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Role of the actuary
B. Actuaries have lost credibility from the last trough in the underwriting cycle
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Role of the actuary
C. The Property Cat model (i.e. establishment of standard statistical analysis of loss expectation) is exportable to other lines of business beyond Personal Lines
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Role of the actuary
D. Actuaries are most valuable in the reserving process as opposed to the pricing process
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