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CICA Your Actuarial Report – Understanding/Getting Most Out of It

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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.

Businesswoman Actuarial Report Presentation
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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:

  • 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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James Moore

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Mgmt Consultants, Inc. in 1996. J&L’s mission is to reduce our clients’ Workers Compensation premiums by using time-tested techniques. J&L’s claims, premium, reserve and Experience Mod reviews have saved employers over $9.8 million in earned premiums over the last three years. J&L has saved numerous companies from bankruptcy proceedings as a result of insurance overpayments.

James has over 27 years of experience in insurance claims, audit, and underwriting, specializing in Workers’ Compensation. He has supervised, and managed the administration of Workers’ Compensation claims, and underwriting in over 45 states. His professional experience includes being the Director of Risk Management for the North Carolina School Boards Association. He created a very successful Workers’ Compensation Injury Rehabilitation Unit for school personnel.

James’s educational background, which centered on computer technology, culminated in earning a Masters of Business Administration (MBA); an Associate in Claims designation (AIC); and an Associate in Risk Management designation (ARM). He is a Chartered Financial Consultant (ChFC) and a licensed financial advisor. The NC Department of Insurance has certified him as an insurance instructor. He also possesses a Bachelors’ Degree in Actuarial Science.

LexisNexis has twice recognized his blog as one of the Top 25 Blogs on Workers’ Compensation. J&L has been listed in AM Best’s Preferred Providers Directory for Insurance Experts – Workers Compensation for over eight years. He recently won the prestigious Baucom Shine Lifetime Achievement Award for his volunteer contributions to the area of risk management and safety. James was recently named as an instructor for the prestigious Insurance Academy.

James is on the Board of Directors and Treasurer of the North Carolina Mid-State Safety Council. He has published two manuals on Workers’ Compensation and three different claims processing manuals. He has also written and has been quoted in numerous articles on reducing Workers’ Compensation costs for public and private employers. James publishes a weekly newsletter with 7,000 readers.

He currently possess press credentials and am invited to various national Workers Compensation conferences as a reporter.

James’s articles or interviews on Workers’ Compensation have appeared in the following publications or websites:

  • Risk and Insurance Management Society (RIMS)
  • Entrepreneur Magazine
  • Bloomberg Business News
  • WorkCompCentral.com
  • Claims Magazine
  • Risk & Insurance Magazine
  • Insurance Journal
  • Workers Compensation.com
  • LinkedIn, Twitter, Facebook and other social media sites
  • Various trade publications

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