This document summarizes a presentation comparing and contrasting reserving approaches for California workers compensation and Argentina auto liability. It discusses how high and changing inflation in Argentina violates chainladder assumptions and requires adjusting paid and incurred triangles for inflation. It also discusses how major reforms in California workers compensation have impacted development factors and medical inflation, requiring reform-adjusted triangles and separate projection of frequency and severity trends.
Macroeconometric analysis of Ecuador's inflation before and after dollarization, proposing a model to explain where Ecuador's inflation comes from nowadays
A presentation made by Norman Walzer and Brian Harger to the State of Ingenuity steering committee on November 18, 2011 at the University of Wisconsin at Whitewater.
The document summarizes economic data for Decatur, TX showing the local economy has recovered from the recession. Key points include:
- Decatur has experienced growth in population, businesses, employment and taxable property values since 2000.
- The economy has diversified away from basic services with growth in healthcare, manufacturing and wholesale trade.
- Partnerships between education, workforce programs and local industry are emphasized as important to support continued economic development.
The document provides an overview of economic, political, and social issues from 2011. It discusses topics like the US debt crisis, Occupy Wall Street movement, unemployment, equine industry trends, veterinary market trends, student debt levels, and new technologies like mobile payments and social media. The document aims to inform veterinary professionals about major issues and developments that could impact their practices.
Pennsylvania faces significant fiscal challenges that threaten to further weaken its credit quality if not addressed, including a large unfunded pension liability and structural budget imbalance. Its economic growth and tax revenues have lagged other states, and proposed solutions like a shale gas tax would not cure its problems. Pennsylvania's credit ratings were downgraded in 2014 due to these structural issues, and its credit quality is expected to continue deteriorating without policy changes that address its pension costs and spending levels.
The U.S. Energy Information Administration performs an annual comprehensive review of all sources of energy used in the U.S., and they take their best guess at where supply and demand--and prices--will go in the near- and long-term (to 2040 for this report). The EIA employs some of the best brains in the business and of all the government agencies, the EIA is least susceptible to political manipulation by The White House.
The document provides information about the Annual Energy Outlook 2014 report prepared by the U.S. Energy Information Administration. It lists the directors and contributors responsible for preparing the report. It also provides contact information for questions about specific topics covered in the report such as economic activity, electricity generation, and renewable energy. The report projections energy supply, demand, and prices in the United States through 2040 based on the National Energy Modeling System.
Macroeconometric analysis of Ecuador's inflation before and after dollarization, proposing a model to explain where Ecuador's inflation comes from nowadays
A presentation made by Norman Walzer and Brian Harger to the State of Ingenuity steering committee on November 18, 2011 at the University of Wisconsin at Whitewater.
The document summarizes economic data for Decatur, TX showing the local economy has recovered from the recession. Key points include:
- Decatur has experienced growth in population, businesses, employment and taxable property values since 2000.
- The economy has diversified away from basic services with growth in healthcare, manufacturing and wholesale trade.
- Partnerships between education, workforce programs and local industry are emphasized as important to support continued economic development.
The document provides an overview of economic, political, and social issues from 2011. It discusses topics like the US debt crisis, Occupy Wall Street movement, unemployment, equine industry trends, veterinary market trends, student debt levels, and new technologies like mobile payments and social media. The document aims to inform veterinary professionals about major issues and developments that could impact their practices.
Pennsylvania faces significant fiscal challenges that threaten to further weaken its credit quality if not addressed, including a large unfunded pension liability and structural budget imbalance. Its economic growth and tax revenues have lagged other states, and proposed solutions like a shale gas tax would not cure its problems. Pennsylvania's credit ratings were downgraded in 2014 due to these structural issues, and its credit quality is expected to continue deteriorating without policy changes that address its pension costs and spending levels.
The U.S. Energy Information Administration performs an annual comprehensive review of all sources of energy used in the U.S., and they take their best guess at where supply and demand--and prices--will go in the near- and long-term (to 2040 for this report). The EIA employs some of the best brains in the business and of all the government agencies, the EIA is least susceptible to political manipulation by The White House.
The document provides information about the Annual Energy Outlook 2014 report prepared by the U.S. Energy Information Administration. It lists the directors and contributors responsible for preparing the report. It also provides contact information for questions about specific topics covered in the report such as economic activity, electricity generation, and renewable energy. The report projections energy supply, demand, and prices in the United States through 2040 based on the National Energy Modeling System.
The document discusses tactics for managing credit risk and surviving an economic downturn. It outlines key topics like recognizing signs of a downturn and mitigating risk. Various reports and metrics are presented for tracking portfolio performance, monitoring for risk, and making adjustments to credit policies in response to changing economic conditions. Maintaining close observation of portfolio trends is presented as important for navigating a potential economic slowdown.
Grupo Supervielle is a leading universal financial services provider in Argentina. It operates a nationwide distribution network of over 300 access points. In the second quarter of 2016, Supervielle began delivering on its growth strategy, though its consumer portfolio was impacted by high inflation and lower short-term economic expectations. Supervielle aims to utilize its new capital to further grow its business, focusing on consumer finance, retirees, small- and medium-sized enterprises, and middle market clients. The company sees potential for continued strong growth in its core business areas.
This document summarizes techniques for estimating claim liabilities, including the loss development factor method, Bornhuetter-Ferguson method, Cape Cod method, and Benktander method. It provides examples of loss triangles and calculations for each technique. Key steps include developing loss development factors from historical data, selecting development factors, and calculating unpaid losses. More advanced techniques address issues like changing inflation, trends, outliers, and tail estimation. Communication with claims and underwriting is emphasized.
This document discusses key concepts in economic statistics including:
1. The stages of the research process include problem identification, generating hypotheses, conducting research, statistical analysis, and drawing conclusions.
2. Descriptive statistics summarize and describe data while inferential statistics make inferences about a population based on a sample.
3. Data can be qualitative, quantitative, cross-sectional, or time-series. Common descriptive statistics include the mean, median, mode, standard deviation, and range.
- Clermont County's 2016 medical, prescription drug, and total claims costs increased compared to 2015, with total claims costs rising 16.1% and per employee per month costs rising 15.2%
- Musculoskeletal conditions drove increased costs the most, rising 45.7% from 2015 to 2016
- HORAN will be conducting requests for proposals for medical administration, stop loss insurance, and dental coverage to be sent in mid-May for renewals effective January 2018
iHT² Health IT Summit New York - Cancer Care Ontario Presentation "Transforming Data into Meaningful Information to Support Improved Patient Care"
Presentation "Transforming Data into Meaningful Information to Support Improved Patient Care"
Learning Objectives:
∙ Understand the information imperative for Cancer Care Ontario (CCO), one of the largest provincial health organizations in Canada, as it supports
population-based care co-ordination and administration for 3 clinical domains in the province of Ontario: cancer care, renal care, and access to
care
∙ Learn how the organization built the Informatics Centre of Excellence to better enable the acquisition, management, reporting, and analysis of one
of the broadest and richest data sets in the country
∙ Discuss concrete examples of how CCO has used leading-edge analytic techniques to drive health system performance.
Vickie Welch
Director, Informatics Centre of Excellence
Cancer Care Ontario
Hakim Lakhani
Director, Reporting and Analytics, Informatics Centre of Excellence
Cancer Care Ontario
Presentation by Dr. Justin Ram, Director, Economics Department, CDB on the regional economic performance, including a recommended action plan for economic stability and growth in the Caribbean, and policy prescriptions.
This presentation was delivered by Dr. Justin Ram, Director, Economics Department, CDB, at the Bank's Annual News Conference in Barbados on February 17, 2017. For more information about the Caribbean economy, visit www.caribank.org.
The document provides an analysis of Union Pacific Corporation by the Student Management Investment Fund. It includes economic data, an industry outlook, company information on UNP, drivers of the company, a company analysis, and a valuation analysis. The summary recommends buying UNP as it has a simple business model, favorable long-term prospects, is operated by experienced management, and is available at an attractive price below the $98 target price, offering 26.4% upside.
The document provides an analysis of Union Pacific Corporation by the Student Management Investment Fund. It includes economic data, an industry outlook, company information on UNP, drivers and risks for the company, management profiles, and financial analyses. The fund finds UNP undervalued given its stable business model, experienced management, and attractive price, and recommends buying the stock with a 26.4% upside to a $98 target price.
This presentation discusses using survey data to analyze elderly welfare and pension systems. It provides an overview of social protection programs and pensions frameworks. Survey data strengths include representing the entire population, while limitations include being a static snapshot. The presentation explores applying survey indicators like poverty, living arrangements, and elderly income generation to assess environment and performance of elderly welfare. Future work may focus on under-researched areas and exploiting existing survey data.
The document summarizes the impact of the Great Recession on state pension funding shortfalls. It finds that between 2008-2009, state pension funding levels declined from 84% to 78% funded and the total funding gap grew by 26% to $1.26 trillion. 31 states were below the recommended 80% funding level in 2009, up from 22 states in 2008. The recession severely impacted state revenues and constrained their ability to make required pension payments. Total annual pension costs grew from $27 billion in 2000 to $68 billion in 2009 but states only paid 83% of the required amount in 2009. Looking ahead, slow revenue growth may limit states' ability to fully fund pensions.
Mark Vitner, managing director and senior economist at Wells Fargo, keynoted the 2014 Economic Outlook Briefing, describing trends and the latest economic issues facing the nation and the region.
Based in Charlotte, Vitner writes for the company’s Monthly Economic Outlook report, the Weekly Economic & Financial Commentary, and also provides regular updates on the housing markets, commercial real estate, regional economies, and inflation. Vitner’s commentary has been featured in the New York Times, Wall Street Journal, and Bloomberg, among other publications.
In addition to Vitner’s economic forecast, briefing attendees heard the results of the Chamber’s annual Economic Conditions Survey, an online survey that gauges our community’s thoughts on the current economy based on Chamber member response.
Annie Williams Real Estate Report July-Aug 2017Annie Williams
Two major changes in the mortgage market go into effect this month, and both could help millions more borrowers qualify for a home loan. First, the three major credit reporting agencies will drop tax liens and civil
judgments from consumer profiles if the data is not complete. Specifically, the data must include the person’s
name, address, and either date of birth or social security number. It seems many profiles do not have all this data. This alone could raise FICO scores by as much as 20 points for affected consumers. Second, mortgage giants Fannie Mae and Freddie Mac are allowing borrowers to have higher levels of debt and still qualify for a home loan. The two are raising their debt-to-income ratio limit to 50 percent of pretax income from 45 percent.
How location can mitigate risk exposure to your inaurance portfolioDMTI Spatial
On March 11th, 2015 Canadian Underwriter magazine and DMTI Spatial partnered to broadcast a webinar on how location can provide the pivot-point to reducing risk exposure on your book of business for the Canadian insurance industry
To view the archive - please go to: http://edge.media-server.com/m/p/j8frvavt
This document summarizes the results of the University of California's "Be Smart About Safety" (BSAS) program from fiscal years 2005-2010. Some key points:
- BSAS was created to fund new loss prevention initiatives aimed at reducing workers' compensation costs. It allocated 10% of each location's workers' comp accrual rate to these programs.
- Funding was directed towards various areas like ergonomics, safety training, wellness programs, and more. Ergonomics received the most funding.
- Analysis of claim data found reductions in claims frequency, severity, and loss rates that outpaced the industry average. Locations with ergonomic investments saw the strongest improvements to ergonomic
The document discusses tactics for managing credit risk and surviving an economic downturn. It outlines key topics like recognizing signs of a downturn and mitigating risk. Various reports and metrics are presented for tracking portfolio performance, monitoring for risk, and making adjustments to credit policies in response to changing economic conditions. Maintaining close observation of portfolio trends is presented as important for navigating a potential economic slowdown.
Grupo Supervielle is a leading universal financial services provider in Argentina. It operates a nationwide distribution network of over 300 access points. In the second quarter of 2016, Supervielle began delivering on its growth strategy, though its consumer portfolio was impacted by high inflation and lower short-term economic expectations. Supervielle aims to utilize its new capital to further grow its business, focusing on consumer finance, retirees, small- and medium-sized enterprises, and middle market clients. The company sees potential for continued strong growth in its core business areas.
This document summarizes techniques for estimating claim liabilities, including the loss development factor method, Bornhuetter-Ferguson method, Cape Cod method, and Benktander method. It provides examples of loss triangles and calculations for each technique. Key steps include developing loss development factors from historical data, selecting development factors, and calculating unpaid losses. More advanced techniques address issues like changing inflation, trends, outliers, and tail estimation. Communication with claims and underwriting is emphasized.
This document discusses key concepts in economic statistics including:
1. The stages of the research process include problem identification, generating hypotheses, conducting research, statistical analysis, and drawing conclusions.
2. Descriptive statistics summarize and describe data while inferential statistics make inferences about a population based on a sample.
3. Data can be qualitative, quantitative, cross-sectional, or time-series. Common descriptive statistics include the mean, median, mode, standard deviation, and range.
- Clermont County's 2016 medical, prescription drug, and total claims costs increased compared to 2015, with total claims costs rising 16.1% and per employee per month costs rising 15.2%
- Musculoskeletal conditions drove increased costs the most, rising 45.7% from 2015 to 2016
- HORAN will be conducting requests for proposals for medical administration, stop loss insurance, and dental coverage to be sent in mid-May for renewals effective January 2018
iHT² Health IT Summit New York - Cancer Care Ontario Presentation "Transforming Data into Meaningful Information to Support Improved Patient Care"
Presentation "Transforming Data into Meaningful Information to Support Improved Patient Care"
Learning Objectives:
∙ Understand the information imperative for Cancer Care Ontario (CCO), one of the largest provincial health organizations in Canada, as it supports
population-based care co-ordination and administration for 3 clinical domains in the province of Ontario: cancer care, renal care, and access to
care
∙ Learn how the organization built the Informatics Centre of Excellence to better enable the acquisition, management, reporting, and analysis of one
of the broadest and richest data sets in the country
∙ Discuss concrete examples of how CCO has used leading-edge analytic techniques to drive health system performance.
Vickie Welch
Director, Informatics Centre of Excellence
Cancer Care Ontario
Hakim Lakhani
Director, Reporting and Analytics, Informatics Centre of Excellence
Cancer Care Ontario
Presentation by Dr. Justin Ram, Director, Economics Department, CDB on the regional economic performance, including a recommended action plan for economic stability and growth in the Caribbean, and policy prescriptions.
This presentation was delivered by Dr. Justin Ram, Director, Economics Department, CDB, at the Bank's Annual News Conference in Barbados on February 17, 2017. For more information about the Caribbean economy, visit www.caribank.org.
The document provides an analysis of Union Pacific Corporation by the Student Management Investment Fund. It includes economic data, an industry outlook, company information on UNP, drivers of the company, a company analysis, and a valuation analysis. The summary recommends buying UNP as it has a simple business model, favorable long-term prospects, is operated by experienced management, and is available at an attractive price below the $98 target price, offering 26.4% upside.
The document provides an analysis of Union Pacific Corporation by the Student Management Investment Fund. It includes economic data, an industry outlook, company information on UNP, drivers and risks for the company, management profiles, and financial analyses. The fund finds UNP undervalued given its stable business model, experienced management, and attractive price, and recommends buying the stock with a 26.4% upside to a $98 target price.
This presentation discusses using survey data to analyze elderly welfare and pension systems. It provides an overview of social protection programs and pensions frameworks. Survey data strengths include representing the entire population, while limitations include being a static snapshot. The presentation explores applying survey indicators like poverty, living arrangements, and elderly income generation to assess environment and performance of elderly welfare. Future work may focus on under-researched areas and exploiting existing survey data.
The document summarizes the impact of the Great Recession on state pension funding shortfalls. It finds that between 2008-2009, state pension funding levels declined from 84% to 78% funded and the total funding gap grew by 26% to $1.26 trillion. 31 states were below the recommended 80% funding level in 2009, up from 22 states in 2008. The recession severely impacted state revenues and constrained their ability to make required pension payments. Total annual pension costs grew from $27 billion in 2000 to $68 billion in 2009 but states only paid 83% of the required amount in 2009. Looking ahead, slow revenue growth may limit states' ability to fully fund pensions.
Mark Vitner, managing director and senior economist at Wells Fargo, keynoted the 2014 Economic Outlook Briefing, describing trends and the latest economic issues facing the nation and the region.
Based in Charlotte, Vitner writes for the company’s Monthly Economic Outlook report, the Weekly Economic & Financial Commentary, and also provides regular updates on the housing markets, commercial real estate, regional economies, and inflation. Vitner’s commentary has been featured in the New York Times, Wall Street Journal, and Bloomberg, among other publications.
In addition to Vitner’s economic forecast, briefing attendees heard the results of the Chamber’s annual Economic Conditions Survey, an online survey that gauges our community’s thoughts on the current economy based on Chamber member response.
Annie Williams Real Estate Report July-Aug 2017Annie Williams
Two major changes in the mortgage market go into effect this month, and both could help millions more borrowers qualify for a home loan. First, the three major credit reporting agencies will drop tax liens and civil
judgments from consumer profiles if the data is not complete. Specifically, the data must include the person’s
name, address, and either date of birth or social security number. It seems many profiles do not have all this data. This alone could raise FICO scores by as much as 20 points for affected consumers. Second, mortgage giants Fannie Mae and Freddie Mac are allowing borrowers to have higher levels of debt and still qualify for a home loan. The two are raising their debt-to-income ratio limit to 50 percent of pretax income from 45 percent.
How location can mitigate risk exposure to your inaurance portfolioDMTI Spatial
On March 11th, 2015 Canadian Underwriter magazine and DMTI Spatial partnered to broadcast a webinar on how location can provide the pivot-point to reducing risk exposure on your book of business for the Canadian insurance industry
To view the archive - please go to: http://edge.media-server.com/m/p/j8frvavt
This document summarizes the results of the University of California's "Be Smart About Safety" (BSAS) program from fiscal years 2005-2010. Some key points:
- BSAS was created to fund new loss prevention initiatives aimed at reducing workers' compensation costs. It allocated 10% of each location's workers' comp accrual rate to these programs.
- Funding was directed towards various areas like ergonomics, safety training, wellness programs, and more. Ergonomics received the most funding.
- Analysis of claim data found reductions in claims frequency, severity, and loss rates that outpaced the industry average. Locations with ergonomic investments saw the strongest improvements to ergonomic
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
Solution Manual For Financial Accounting, 8th Canadian Edition 2024, by Libby...Donc Test
Solution Manual For Financial Accounting, 8th Canadian Edition 2024, by Libby, Hodge, Verified Chapters 1 - 13, Complete Newest Version Solution Manual For Financial Accounting, 8th Canadian Edition by Libby, Hodge, Verified Chapters 1 - 13, Complete Newest Version Solution Manual For Financial Accounting 8th Canadian Edition Pdf Chapters Download Stuvia Solution Manual For Financial Accounting 8th Canadian Edition Ebook Download Stuvia Solution Manual For Financial Accounting 8th Canadian Edition Pdf Solution Manual For Financial Accounting 8th Canadian Edition Pdf Download Stuvia Financial Accounting 8th Canadian Edition Pdf Chapters Download Stuvia Financial Accounting 8th Canadian Edition Ebook Download Stuvia Financial Accounting 8th Canadian Edition Pdf Financial Accounting 8th Canadian Edition Pdf Download Stuvia
BONKMILLON Unleashes Its Bonkers Potential on Solana.pdfcoingabbar
Introducing BONKMILLON - The Most Bonkers Meme Coin Yet
Let's be real for a second – the world of meme coins can feel like a bit of a circus at times. Every other day, there's a new token promising to take you "to the moon" or offering some groundbreaking utility that'll change the game forever. But how many of them actually deliver on that hype?
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
Understanding how timely GST payments influence a lender's decision to approve loans, this topic explores the correlation between GST compliance and creditworthiness. It highlights how consistent GST payments can enhance a business's financial credibility, potentially leading to higher chances of loan approval.
Vicinity Jobs’ data includes more than three million 2023 OJPs and thousands of skills. Most skills appear in less than 0.02% of job postings, so most postings rely on a small subset of commonly used terms, like teamwork.
Laura Adkins-Hackett, Economist, LMIC, and Sukriti Trehan, Data Scientist, LMIC, presented their research exploring trends in the skills listed in OJPs to develop a deeper understanding of in-demand skills. This research project uses pointwise mutual information and other methods to extract more information about common skills from the relationships between skills, occupations and regions.
1. Reserving in Uncertain
Economic Conditions
Compare and Contrast
California Workers Compensation
and Argentina Auto Liability
Alejandro Ortega, FCAS
Tony Milano, FCAS - WCIRB
Marcela Granados, FCAS - EY
May 17, 2016
Seattle, WA
CAS Spring Meeting
3. Inflation
Low Inflation High Inflation
Short Tail US First Party Auto
US Personal Property
Venezuela – All products
Argentina – Personal Property
Long Tail US Casualty
US (x‐CA) Workers Comp
Argentina Auto
California Workers Comp
6. High Inflation – Long Tail
• Auto – Third Party Bodily Injury
• First Party is short tailed
• The Inflation makes the tail even longer
7. Drivers of the Tail – Lawsuits Outstanding
• Litigious Culture in Argentina
• Growing since ~2007
Company June 2007 June 2009 June 2011 Dec 2013
Federacion Patronal 6,842 9,962 13,939 16,818
Caja Seguros 7,637 11,942 15,864 12,576
Provincia 6,222 7,763 8,242 7,691
QBE LA Buenos Aires 4,552 5,163 5,546 7,335
San Cristobal 2,978 4,637 5,396 6,526
Zurich Argentina 3,506 4,553 7,776 6,207
Seguros Rivadavia 2,640 3,109 3,955 6,104
Liderar 2,304 2,812 3,836 5,485
Aseg. Federal Arg 1,298 2,578 3,387 5,288
Segunda C.C.L 3,792 4,574 5,064 4,561
La Meridional (AIG) 4,647 5,348 8,166 4,533
Total 46,418 62,441 81,171 83,124
8. Assumptions of Chainladder
Thomas Mack
1. Expected Incremental Losses are proportional to
losses Reported to Date
2. Losses in AY are independent of losses in other
accident years
3. Variance of incremental losses is proportional to losses
reported to date
• High and Changing Inflation produces Calendar Year Effect
• Litigious Growth also a CY Effect
• Assumptions 1 & 2 are violated
9. Assumptions of Chainladder
•Chainladder implicitly takes the inflation in the triangle
and forecasts from there
• When inflation is changing – this is not appropriate
•We will end up with a methodology that allows us to
forecast different levels of inflation
10. How to set Reserves
• Adjust Paid Triangle for Inflation
• Adjust Incurred Triangle for Inflation
• Paid Only Triangle
• Average Severity to Date
• Future Closed Paid Claims x Future Severity
Closed Paid Claims Severity
X =
Unpaid Losses
11. Fisher Lange
• Closed Claims are easy to estimate
• Allows different assumptions for future inflation (and
interest)
• Granular Result
• Sensitivity Testing vs Case Reserves
Closed Paid Claims Severity
X =
Unpaid Losses
15. Severity
Severity
• We are paying for the time value of money – twice
• Our 2009 claim, in 2013 is 60 months old
• By waiting one more year to close it in 2014:
• We pay an additional year of interest (~12%)
• Cost of a Point is also increased (~9%)
• Total cost of claim goes up about 22%
20. High Inflation Environment
• Argentina has additional complications due to changing
legal environment
• High Inflation is typically associated with a weak currency,
and changing inflation
• Sometimes it is associated with Social Changes (eg. higher
litigiousness)
• Understanding the underlying drivers of Claim Costs is
Key
• Fisher‐Lange allows you to forecast different levels of
inflation and interest
• Great Tool for Sensitivity Testing
21. Reserving in Uncertain
Economic Conditions
Compare and Contrast
California Workers Compensation
and Argentina Auto Liability
Alejandro Ortega, FCAS
Tony Milano, FCAS - WCIRB
Marcela Granados, FCAS - EY
22. CA WC – A Changing System
Long-tailed Line
Significant Historical Medical Inflation
Major System Reforms
– 2002 through 2004 reforms
– Senate Bill No. 863 (2012)
– Impact both frequency and severity
– Both CY/DY and AY impacts
Volatility Makes Traditional Methods Inaccurate
23. Paid Loss Development Highly
Impacted by System Reforms
2.0
2.2
2.4
2.6
2.8
3.0
3.2
3.4
3.6
3.8
95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
Accident Year
12-to-24 Months Paid Development Factor
Indemnity
Medical2002-2004
Reforms
SB 863
Source: WCIRB aggregate data calls
24. Reforms Impact Development on
Older Years
1.05
1.07
1.09
1.11
1.13
95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
Accident Year
60-to-72 Months Paid Development Factor
Indemnity
Medical
2002-2004
Reforms SB 863
Source: WCIRB aggregate data calls
25. Changes in Benefits Correlated with
Shifts in Claim Frequency
-4.5
-7.9
-4.5 -4.3
-0.1
1.0
-6.7
-1.5
-2.9
-17.0
-13.9
-6.4
-2.3
-3.8
-1.9
6.9
-0.2
3.6
0.7 1.2
-1.0
-20
-15
-10
-5
0
5
10
95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15
Accident Year
Annual % Change in Indemnity Claim Frequency
California
NCCI
2002-2004
Reforms
SB 863
Source: California data from WCIRB unit statistical reports. NCCI data from the May 14, 2015
State of the Line presentation.
26. Periods of Signif. Medical Inflation
Followed by Periods of Decline
14.1
7.7
19.7
21.9
14.0 13.5
18.6
1.7
-4.4
-7.3
3.3
10.2
12.7
9.5
6.1
1.4 0.7
-3.1 -3.8
-2.2
0.8
-10
-5
0
5
10
15
20
25
95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15
Accident Year
Annual % Change in Ultimate Medical per Indemnity Claim
California
NCCI
2002-2004
Reforms
SB 863
Source: California data from WCIRB aggregate data calls and actuarial projections as of
12/31/2015. NCCI data from the May 14, 2015 State of the Line presentation.
27. Developing in a Changing
Environment
Reforms Distort Historical LDF Triangles
– Mix of pre & post-reform data
WCIRB Solution: Adjust LDFs for Major
Changes
– Indemnity – analyze changes by type of benefit and
timing of benefit payments
– Medical – “on-level” pre-reform payments in LDF
Adjusted Triangles Now at Comparable Level
28. Reform Adjustments Have
Increased Accuracy of Projection
0
0.1
0.2
0.3
0.4
0.5
0.6
2005 2008
Accident Year
Projected Ultimate Medical Loss Ratios
Projected from 12 Mo. - Unadjusted Paid
Projected from 12 Mo. - Reform-Adjusted Paid
Current Projection (@12/31/2015)
Source: WCIRB rate filings and Actuarial Committee agendas
29. Trending in a Changing
Environment
Volatility Affects Historical Loss Ratio Trend
– Trends reversing direction!
WCIRB Solution: Project Separate Frequency &
Severity Trends
Frequency Model Projection
– Modeled with benefit changes & economic conditions
Severity Projections
– Analysis of short and long-term rates
Always Important to Consider Environment
30. Separate Freq./Sev. Trends Improve
Projection During Periods of Change
0.3
0.4
0.5
0.6
0.7
0.8
0.9
2004 2013
Accident Year
Projected On-level Loss Ratios
Projected Using Combined Loss Ratio Trend
Projected Using Separate Freq. & Sev. Trends
Actual On-level Loss Ratio
Source: WCIRB 2012 & 2015 studies of trending methodology. Projections are based on the
average of the latest two years’ ultimate on-level loss ratios.
31. Reserving in Uncertain
Economic Conditions
Compare and Contrast
California Workers Compensation
and Argentina Auto Liability
Alejandro Ortega, FCAS
Tony Milano, FCAS - WCIRB
Marcela Granados, FCAS - EY
32. California WC vs Argentina Auto
Differences
– The US is more regulated than Latin America
– The US doesn’t have high economic inflation
– WC is longer tail than auto
– Difference in claimants, different incentives.
Similarities
– Both jurisdictions are subject to inflation: California has high social
inflation, while Argentina has high economic inflation
– Both lines of business are casualty (rather than property)
– Both jurisdictions are subject to frequent changes in regulation (e.g.
2002 to 2004 reforms and litigious culture in Argentina, growing
since ~2007
– Economic status of claimant plays is a big driver of filing for the
claim
33. Why traditional Methods fail
Assumptions of Chain ladder Thomas Mack
1. Expected Incremental Losses are proportional to losses Reported to
Date
2. Losses in AY are independent of losses in other accident years
3. Variance of incremental losses is proportional to losses reported to date
High and Changing Inflation produces Calendar Year Effect
Litigious Growth also a CY Effect
Assumptions 1 & 2 are violated
34. California WC example
Relationship between inflation and WC Reserve
movement:
0.00
0.20
0.40
0.60
0.80
1.00
1.20
1.40
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15
Ultimate Losses and CPI
by Year
Ultimates Relativities CPI Relativity
2 per. Mov. Avg. (Ultimates Relativities) 2 per. Mov. Avg. (CPI Relativity)
2012: CA
SB863 reform
2002 ~ 2004: CA WC
reforms
35. The Calendar Year Effect
The Chain Ladder link ratio y(i)/x(i) is the slope of a line passing through the origin (a
slope but no intercept).
But mix changes appear on a calendar year basis and predicting losses as lognormal
(skewed to the right) makes more sense. We assume there are 3 directions with
arguments d, w, and t. Ln(Incremental
Payments) =
36. Problems with Chain Ladder in changing
environment
Chain ladder can lead to big errors depending on where you are in the cycle
Chain ladder under predicts in
general (A > E)
From 2001 2004,
chain ladder will
under predict by
35%
Calendar Year
Actual vs Estimated (in $M)
Year Actual Estimated % Diff = (A‐E)/E
2001 8 8 0%
2002 33 24 38%
2003 46 31 46%
2004 48 37 31%
2005 25 34 ‐26%
2006 17 29 ‐41%
2007 21 25 ‐15%
2008 15 20 ‐25%
2009 15 17 ‐16%
2010 17 17 ‐3%
2011 18 17 3%
2012 18 18 ‐2%
2013 18 19 ‐4%
2014 22 18 20%
2015 19 17 13%
Total 339 331 2%
37. What does ICRFS do differently?
Each trend parameter (in each of the trend directions) is tested for
significance.
p
Residuals are now normally
distributed, no longer under
predicts
calendar year trends
Iotas represent the
calendar year trends
38. Comparison of Chain Ladder vs
ModelICRFS provides better estimates in aggregate and by year
.
The model tested against
past data is an improvement
against observed losses
Calendar Year Results (using Chain Ladder)
Actual vs Estimated (in $M)
Year Actual Estimated % Diff
2001 8 8 0%
2002 33 24 38%
2003 46 31 46%
2004 48 37 31%
2005 25 34 ‐26%
2006 17 29 ‐41%
2007 21 25 ‐15%
2008 15 20 ‐25%
2009 15 17 ‐16%
2010 17 17 ‐3%
2011 18 17 3%
2012 18 18 ‐2%
2013 18 19 ‐4%
2014 22 18 20%
2015 19 17 13%
Total 339 331 2%
Calendar Year Results (Using ICRFS)
Actual vs Estimated (in $M)
Year Actual Estimated % Diff
2001 8 9 ‐12%
2002 33 30 10%
2003 46 39 16%
2004 48 41 17%
2005 25 29 ‐13%
2006 17 22 ‐20%
2007 21 21 1%
2008 15 17 ‐12%
2009 15 18 ‐16%
2010 17 18 ‐7%
2011 18 18 ‐4%
2012 18 19 ‐4%
2013 18 19 ‐3%
2014 22 19 14%
2015 19 20 ‐4%
Total 339 339 0%
39. Comparison of Chain Ladder vs
Model
Chain ladder results in understating the reserves by $11M, which is 20% lower
than ICRFS results
.
Accident Year Results (Using Chain Ladder)
Actual vs Estimated (in $M)
Mean
Year Reserves Ultimate
2001 0 69
2002 0 49
2003 0 40
2004 1 25
2005 1 19
2006 1 18
2007 1 19
2008 2 19
2009 2 17
2010 3 16
2011 4 20
2012 5 21
2013 6 19
2014 8 19
2015 10 12
Total 44 383
Accident Year Results (using ICRFS)
Actual vs Estimated (in $M)
Mean
Year Reserves Ultimate
2001 0 69
2002 1 50
2003 1 41
2004 1 26
2005 1 20
2006 2 19
2007 2 19
2008 2 20
2009 3 17
2010 3 16
2011 3 19
2012 4 20
2013 6 19
2014 9 21
2015 16 19
Total 55 394
40. Conclusions
Three different solutions to solve the same problem
1. Using a modified Fisher Lange methods that predicts frequency and
severity separately
2. Adjusting LDFs for major changes on indemnity and medical
3. Using models (regression, GLMs, Mack, Bootstrap) to supplement
traditional actuarial techniques
The three solutions suggest separating the trends, data and results by
frequency and severity
The three solutions suggest separating the trends, data and results by
coverage to link them to economic drivers
1. For WC California, trends are different between medical and indemnity
and interact with different economic drivers (inflation for medical and
unemployment for indemnity)
2. For Argentina Motor, trends are different between judicials and
mediations coverages
41. Great resources to explore reserving
models
Markus Gesman wrote a fantastic chapter on Stochastic Reserving using R,
along with ways of identifying CY Trends and residuals
.
45. CA WC Reforms – 2002 through
2004
AB 749 (2002)
– Increased indemnity benefits
– Repeal of presumption of correctness given to primary treating
physician (Minniear)
AB 227 & SB 228 (2003)
– Changes to voc rehab benefits
– Reductions to medical fee schedules
– Established Medical Treatment Utilization Schedule
– Limited # of chiropractic or PT visits
SB 899 (2004)
– Limited duration of TD
– New PDRS & changes to PD benefits
– Established medical provider networks
46. CA WC Reforms – SB 863
SB 863 (2012)
– Increased PD benefits
– Changes to PD ratings
– Reductions in some medical fees
– Established lien filing fee & statute of limitations
– Established independent medical review and independent bill
review processes
– New physician fee schedule based on RBRVS