CICA Your Actuarial Report – Maximizing The Findings
The CICA Your Actuarial Report covered much ground very quickly for captives. The exact title of the presentation was How to Understand and Get the Most Out of Your Actuarial Report.
The very adept presenters were Michael J. Bemi, CPCU, ARM, ARe – The National Catholic Risk Retention Group, Inc. and Matthew G. Killough, PhD, FCAS, MAAA – Milliman, Inc.
The first area covered was determining how you wish to use your actuarial services.
There are three choices:
StockUnlimited Basic actuarial services
- Business planning and strategy – seemed to fit captives the best
- Communications and education
The actuary you choose needs good accurate data such as your:
- Business model
- Coverage elements and triggers
- Deductibles
- Reinsurance program
Informing the actuary of any changes in your insurance programs is critical – GIGO.
Before diving right into with a huge (yet expensive) actuarial project, you may want to just have a preliminary analyses performed to save much angst later in the process.
An actuarial report should be read like an insurance policy. Read the actuarial report detail including footnotes and appendices. Ask questions if you do not understand something.
The Ultimate Value is determined by past loss history, any future anticipated and IBNR reserves.
The basic actuarial methods are:
- Expected Loss Rate (ELR) –
- Purely exposure-based
- Never incorporates new information
- Can’t be distorted by data issues
- Loss Development – creating Loss Development Factors (LDF’s)
- Utilizes the most recent data
- Updates in response to new information
- Subject to distortion by data issues
The CICA Your Actuarial Report session contained good basic info for captives.
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