Transcript CAS Spring Meeting San Diego, CA May 21, 2002 Can We Talk ? Rose D.

CAS Spring Meeting
San Diego, CA
May 21, 2002
Can We Talk ?
Rose D. Barrett
Martin T. King
Richard O. Kirste
Mark Priven
CAS Spring Meeting
San Diego, CA
May 21, 2002
Can We Talk ?
Skit 1 * Exam * Prizes
Skit 2 * Exam * More Prizes
Skit 3 * Exam * Grand Prize
CAS Spring Meeting
San Diego, CA
May 21, 2002
Arnold B. Nerdly, FCAS, MAAA
Occupation:
Career Path:
1989
1991
1992
1996
1997
1999
2002
Actuary
BS, Mathematics
MS, Statistics
Assistant Junior Analyst I
ACAS
Assistant Actuary
FCAS
Vice President
Quiet Please. Exam in Progress.
What are legitimate reasons for someone to be
attending this 8am multi-general session?
I. Too cheap to buy a breakfast. No plans to attend any sessions;
but, after eating the freebie bran muffin, found himself/herself with
some time to kill before the weather warms up at the pool.
II. Need to fulfill continuing education requirements; and this session
seemed slightly less boring than ERM & Disaster recovery.
III. Figured that he/she might have something to learn here.
a.
b.
c.
d.
e.
I and II
I and III
II and III
all of the above
none of the above
Quiet Please. Exam in Progress.
What are legitimate reasons for someone to be
attending this 8am multi-general session?
Correct Answer...
c. II and III
I. Too cheap to buy a breakfast. No plans to attend any sessions;
but, after eating the freebie bran muffin, found himself/herself with
some time to kill before the weather warms up at the pool.
II. Need to fulfill continuing education requirements; and this session
seemed slightly less boring than ERM & Disaster recovery.
III. Figured that he/she might have something to learn here.
CAS Spring Meeting
San Diego, CA
May 21, 2002
October 31, 1992
Arnold Nerdly
Assistant Junior Intern Actuarial Analyst I
Workers' Compensation Loss Ratio Analysis
Prepared by Arnold Nerdly
Assistant Junior Intern Actuarial Analyst I
October 31, 1992
Workers' Compensation Loss Ratios
0.5
0.45
0.4
0.35
Loss Ratio
0.3
0.25
0.2
0.15
0.1
0.05
0
1980
1981
1982
1983
1984
1985
1986
Accident Year
1987
1988
1989
1990
1991
1992
Workers' Compensation Profitability Analysis
0.6
0.5
Loss Ratio
0.4
0.3
0.2
0.1
0
1980
1981
1982
1983
1984
1985
1986
Accident Year
1987
1988
1989
1990
1991
1992
Page 1 of 27
GL TREND ANALYSIS
a
a
b
b
analysis
poisson values
3.8505E+12
pareto values
3.849E+12
48747.2904
48729.022
1982
1983
1984
1985
1986
12
43,505
46,293
46,545
54,194
83,087
24
44,255
58,227
50,808
48,731
69,045
36
74,061
69,303
70,787
71,365
71,071
48
74,082
71,747
96,708
92,473
91,800
60 106,719
133,284
143,680
156,401
175,117
72
59,905
72,815
54,998
53,939
53,964
84 142,275
134,777
147,737
163,401
174,541
96 166,101
209,869
297,819
313,195
317,093
108 201,945
331,113
281,977
292,058
334,082
120 251,627
477,459
663,460
878,375
881,339
132 628,634 1,006,108
1,328,028
1,271,552 1,375,665
144 189,635
562,379
513,080
971,194
631,993
156 409,030
609,724
860,491
918,760 1,068,932
168 384,084
723,390
718,359
867,886
180 576,467
641,546
920,947
192 563,677
755,771
204 412,213
19821983
1984
Data
Total
###
46293
46545 Count of 1984
1
Average of 1985
54194
Sum of 1986
83087
Count of 1986
1
Product of 1987
83693
46293 Count of 1984
1
46293 Average of 1985
54194
46293 Sum of 1986
83087
46293 Count of 1986
1
46293 Product of 1987
83693
43,505 Count of 1984
1
1987
83,693
69,319
71,071
91,278
164,603
53,964
184,517
312,717
301,073
899,644
1,386,551
616,112
7000159649
7000159699
92000150003
92000150004
92000150007
92000151565
CHC80075988
CHC80079986
DTC80024296
DWC80044236
DWC80053253
EHB80000045
EHB80000208
EHB80000330
EHB80000462
EHB80000592
EHB80000610
EHB80000610
EHB80000610
EHB80000610
EHB80000610
EHB80000610
EHB80000610
EHB80000610
EHB80000610
EHB80000610
LRC80008694
NMU80041038
NMU80042134
9136600
9136700
9132000
9136701
9136701
9136701
9122400
9127301
9132000
9118700
9127301
9132000
9132000
9136600
9136600
9136600
9136600
9136600
9136600
9136600
9136600
9136600
9136600
9136600
9136600
9136600
9132001
9127300
9127300
31-May-94
30-Nov-95
03-Jun-93
31-Mar-96
31-Mar-96
31-Mar-96
05-Mar-92
17-Dec-92
27-Sep-93
30-Jan-91
15-Oct-92
18-Nov-93
23-Feb-94
04-May-94
18-Jul-94
09-Sep-94
26-Sep-94
26-Sep-94
26-Sep-94
26-Sep-94
26-Sep-94
26-Sep-94
26-Sep-94
26-Sep-94
26-Sep-94
26-Sep-94
13-Sep-93
17-Dec-92
17-Mar-93
MEAD
WILLIAMS
KINGSTON
CALAUSTRO
MOTEN
HSIU
WOODWARD
FELICE
WARD
HOLMES
BOUDREAUX
ENDRESS
DRAPER
SHEHAB
GRESKO
DEMAREST
PETTINATO
PETTINATO
PETTINATO
PETTINATO
PETTINATO
PETTINATO
PETTINATO
PETTINATO
PETTINATO
PETTINATO
FURR
TOBIN
FERRARA
Page 2 of 27
GL TREND ANALYSIS
analysis
poisson values
3.85045E+12
1982
1983
1984
1985
12
43,505
46,293
46,545
54,194
24
44,255
58,227
50,808
48,731
36
74,061
69,303
70,787
71,365
48
74,082
71,747
96,708
92,473
60
106,719
133,284
143,680
156,401
72
59,905
72,815
54,998
53,939
84
142,275
134,777
147,737
163,401
96
166,101
209,869
297,819
313,195
108
201,945
331,113
281,977
292,058
120
251,627
477,459
663,460
878,375
132
628,634
1,006,108
1,328,028
1,271,552
144
189,635
562,379
513,080
971,194
156
409,030
609,724
860,491
918,760
168
384,084
723,390
718,359
867,886
180
576,467
641,546
920,947
192
563,677
755,771
204
412,213
1982 1983
1984
Data
Total
###
46293
46545 Count of 1984
1
Average of 1985
54194
Sum of 1986
83087
Count of 1986
1
Product of 1987
83693
46293 Count of 1984
1
46293 Average of 1985
54194
46293 Sum of 1986
83087
46293 Count of 1986
1
46293 Product of 1987
83693
43,505 Count of 1984
1
43,505 Average of 1985
54194
43,505 Sum of 1986
83087
43,505 Count of 1986
1
43,505 Product of 1987
83693
###
58227
50808 Count of 1984
1
Average of 1985
48731
Sum of 1986
69045
Count of 1986
1
Product of 1987
69319
58227 Count of 1984
1
58227 Average of 1985
48731
58227 Sum of 1986
69045
58227 Count of 1986
1
58227 Product of 1987
69319
44,255 Count of 1984
1
44,255 Average of 1985
48731
44,255 Sum of 1986
69045
44,255 Count of 1986
1
44,255 Product of 1987
69319
###
72815
54998 Count of 1984
1
Average of 1985
53939
Sum of 1986
53964
Count of 1986
1
Product of 1987
53964
72815 Count of 1984
1
72815 Average of 1985
53939
72815 Sum of 1986
53964
72815 Count of 1986
1
72815 Product of 1987
53964
59,905 Count of 1984
1
59,905 Average of 1985
53939
59,905 Sum of 1986
53964
59,905 Count of 1986
1
59,905 Product of 1987
53964
###
69303
70787 Count of 1984
1
Average of 1985
71365
Sum of 1986
71071
Count of 1986
1
pareto values
1986
83,087
69,045
71,071
91,800
175,117
53,964
174,541
317,093
334,082
881,339
1,375,665
631,993
1,068,932
1987
83,693
69,319
71,071
91,278
164,603
53,964
184,517
312,717
301,073
899,644
1,386,551
616,112
3.84901E+12
7000159649
7000159699
92000150003
92000150004
92000150007
92000151565
CHC80075988
CHC80079986
DTC80024296
DWC80044236
DWC80053253
EHB80000045
EHB80000208
EHB80000330
EHB80000462
EHB80000592
EHB80000610
EHB80000610
EHB80000610
EHB80000610
EHB80000610
EHB80000610
EHB80000610
EHB80000610
EHB80000610
EHB80000610
LRC80008694
NMU80041038
NMU80042134
OLC80043415
OLC80043416
OLC80046551
OLC80047944
OLC80048849
ORB80049013
PHU80042333
PHU80048800
PHU80050845
PTU80020114
PTU80023538
PTU80024011
PTU80024257
SCB80023092
SCB80024171
SCB80030473
SCB80034879
SCB80040552
SUB80022334
SUB80024203
SUB80025057
SUB80025527
SUB80029039
SUB80029709
SYU80021841
SYU80027254
SYU80028015
THB80000337
THB80000378
THB80000766
THB80001146
THB80001662
THB80001898
WHB80000108
WHB80000160
WHB80000181
WHB80000263
WHB80000324
9136600
9136700
9132000
9136701
9136701
9136701
9122400
9127301
9132000
9118700
9127301
9132000
9132000
9136600
9136600
9136600
9136600
9136600
9136600
9136600
9136600
9136600
9136600
9136600
9136600
9136600
9132001
9127300
9127300
9118700
9118700
9122400
9122400
9127301
9122400
9122400
9132000
9132000
9122400
9127300
9127300
9127300
9118700
9118700
9127300
9127300
9132000
9132001
9136601
9136600
9136601
9136701
9136700
9122400
9127300
9132000
9136601
9136601
9136601
9136701
9136701
9136701
9127300
9136600
9136600
9136600
9132000
31-May-94
30-Nov-95
03-Jun-93
31-Mar-96
31-Mar-96
31-Mar-96
05-Mar-92
17-Dec-92
27-Sep-93
30-Jan-91
15-Oct-92
18-Nov-93
23-Feb-94
04-May-94
18-Jul-94
09-Sep-94
26-Sep-94
26-Sep-94
26-Sep-94
26-Sep-94
26-Sep-94
26-Sep-94
26-Sep-94
26-Sep-94
26-Sep-94
26-Sep-94
13-Sep-93
17-Dec-92
17-Mar-93
04-Mar-91
04-Mar-91
22-Oct-91
05-Mar-92
27-May-92
14-Feb-92
25-Oct-91
26-Apr-93
06-Oct-93
29-May-91
29-May-92
21-Jul-92
21-Aug-92
01-Oct-90
01-Jun-90
12-May-92
02-Nov-92
07-Oct-93
03-Jun-93
27-Apr-94
28-Jul-94
15-Sep-94
12-Aug-95
11-Oct-95
08-Jul-91
09-Feb-93
05-Apr-93
19-May-94
06-Jun-94
04-Nov-94
14-Jun-95
09-Dec-95
26-Jan-96
17-Oct-92
27-Jun-94
08-Jul-94
16-Oct-94
01-Jul-93
MEAD
WILLIAMS
KINGSTON
CALAUSTRO
MOTEN
HSIU
WOODWARD
FELICE
WARD
HOLMES
BOUDREAUX
ENDRESS
DRAPER
SHEHAB
GRESKO
DEMAREST
PETTINATO
PETTINATO
PETTINATO
PETTINATO
PETTINATO
PETTINATO
PETTINATO
PETTINATO
PETTINATO
PETTINATO
FURR
TOBIN
FERRARA
BLACKKETTER
JANSTO
MCKENZIE
VANBIBBER
OAKES
ZEHDAR
SUKEENA
MURPHY
BATHAVIC
RAE
LEWIS
MCGREGOR
MCKENDRY
DENTON
GILL
VALLEJOS
STOIAN
DUNCAN
CARLSON
WILKENS
OTTO
LEHNING
RANDOLPH
BARNHART
GRIFFIN
ROCHEFORT
DEMAREST
HALEY
MORTON
CASEY
SONNIER
SIMPSON
WHITE
LOWRY
HOYE
JONES
AMREIN
VIOLETTE
Quiet Please. Exam in Progress.
Although Mr. Ferguson is clearly a buffoon most of the time, he did
ask at least one pertinent question that Nerdly should have been
prepared to answer. Which of the following questions are we
talking about?
I. What are you wearing there, boy?
II. How does this affect my bottom line?
III. Are you familiar with the Sharper Image Nose Hair Trimmer?
a.
b.
c.
d.
e.
I and II
I and III
II and III
all of the above
none of the above
Quiet Please. Exam in Progress.
Which of the following questions are we talking about?
Correct Answer...
a. I and II
I. What are you wearing there, boy?
II. How does this affect my bottom line?
III. Are you familiar with the Sharper Image Nose Hair Trimmer?
Which of the following are good preparation steps before an
important presentation?
I. Asking your boss to attend important meetings as back-up support.
II. Staying up all night revising and printing exhibits.
III. Drinking five cups of coffee.
a.
b.
c.
d.
e.
I only
II only
III only
all of the above
none of the above
Quiet Please. Exam in Progress.
Which of the following are good preparation steps
before an important presentation?
Correct Answer...
a. I only
I. Letting your boss know what you'll be presenting to the CFO
tomorrow.
II. Staying up all night revising and printing exhibits.
III. Drinking five cups of coffee.
Donna Wannabe had a right to be upset about which of the following:
I. Nerdly dressing like a leprechaun
II. Nerdly changing his analysis without informing Donna before the
meeting
III. Ferguson being a buffoon
a.
b.
c.
d.
e.
I and II
I and III
II and III
all of the above
none of the above
Quiet Please. Exam in Progress.
Donna Wannabe had a right to be upset about which of
the following:
Correct Answer...
a. I and II
I. Nerdly dressing like a leprechaun
II. Nerdly changing his analysis without informing Donna before the
meeting
III. Ferguson being a buffoon
CAS Spring Meeting
San Diego, CA
May 21, 2002
November 15, 1996
Arnold Nerdly, ACAS
Assistant Actuary
EXHIBIT 1
SHARKI AUTOMOTIVE EMPIRE - OVERALL LOSS RATIOS
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
ACC-YEAR
PD
LOSS
RATIO*
INC
LOSS
RATIO**
INC/IBNER
LOSS
RATIO***
INC/IBNR
LOSS
RATIO****
INC/IBLAL
LOSS
RATIO*****
INC/IBLA
LOSS
RATIO******
INC/BLAH
LOSS
RATIO******
1999
66.0%
79.0%
81.0%
83.0%
90.0%
94.0%
99.0%
2000
51.0%
58.0%
80.0%
85.0%
94.0%
97.0%
102.0%
2001
33.0%
62.0%
83.0%
94.0%
97.0%
100.0%
105.0%
TOTAL
48.0%
82.0%
81.0%
90.0%
94.0%
97.0%
102.0%
*
**
***
****
*****
******
*******
Paid losses only
Paid plus case incurred losses
Paid plus case incurred plus IBNER losses
Paid plus case incurred plus IBNR losses
Paid plus case incurred plus IBNR losses plus Allocated Loss Adjustment Expense
Paid plus case incurred losses plus IBNR plus ALAE and ULAE
Paid plus case incurred losses plus IBNR plus all LAE plus are you really reading this?
EXHIBIT 2
SHARKI AUTOMOTIVE EMPIRE - WORKERS COMP LOSS RATIOS
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
ACC-YEAR
PD
LOSS
RATIO*
INC
LOSS
RATIO**
INC/IBNER
LOSS
RATIO***
INC/IBNR
LOSS
RATIO****
INC/IBLAL
LOSS
RATIO*****
INC/IBLA
LOSS
RATIO******
INC/BLAH
LOSS
RATIO******
1999
81.0%
85.0%
85.0%
90.0%
98.0%
102.0%
111.0%
2000
62.0%
69.0%
88.0%
93.0%
99.0%
109.0%
118.0%
2001
40.0%
70.0%
90.0%
95.0%
104.0%
115.0%
120.0%
TOTAL
60.0%
73.0%
87.0%
93.0%
100.0%
108.0%
116.0%
*
**
***
****
*****
******
*******
Paid losses only
Paid plus case incurred losses
Paid plus case incurred plus IBNER losses
Paid plus case incurred plus IBNR losses
Paid plus case incurred plus IBNR losses plus Allocated Loss Adjustment Expense
Paid plus case incurred losses plus IBNR plus ALAE and ULAE
Paid plus case incurred losses plus IBNR plus all LAE plus are you really reading this?
Quiet Please. Exam in Progress.
While presenting his analysis to Sharki, Nerdly misses at least one
good opportunity to:
I. Educate Mr. Sharki on some recent developments in pricing theory
II. Return the conversation to its main subject - Sharki’s renewal price
III. Dump his Volvo for a better car
a.
b.
c.
d.
e.
I only
II only
III only
I and III
all of the above
Quiet Please. Exam in Progress.
While presenting his analysis to Sharki, Nerdly misses
at least one good opportunity to:
Correct Answer...
b. II only
I. Educate Mr. Sharki on some recent developments in pricing theory
II. Return the conversation to its main subject - Sharki’s renewal price
III. Dump his Volvo for a better car
In retrospect, Nerdly should have expected his exhibits of loss
ratios to be:
I. Defended tooth and nail by Ms. Wannabe
II. Too detailed and busy for a client to follow easily
III. Discarded by Sharki at the first opportunity
a.
b.
c.
d.
e.
I and II
I and III
II and III
all of the above
none of the above
Quiet Please. Exam in Progress.
Nerdly should have expected his exhibits of loss ratios
to be:
Correct Answer...
c. II and III
I. Defended tooth and nail by Ms. Wannabe
II. Too detailed and busy for a client to follow easily
III. Discarded by Sharki at the first opportunity
Which of the following are not not false?
I. A guy like Sharki won’t listen to anyone or anything
II. Nerdly’s “stupid people” joke is a good way to break the ice with a
stranger
III. Nerdly never had control of this meeting
a.
b.
c.
d.
e.
I and II
I and III
II and III
all of the above
none of the above
Quiet Please. Exam in Progress.
Which of the following are not not false?
Correct Answer...
a. I and II
I. A guy like Sharki won’t listen to anyone or anything
II. Nerdly’s “stupid people” joke is a good way to break the ice with a
stranger
III. Nerdly never had control of this meeting
CAS Spring Meeting
San Diego, CA
May 21, 2002
May 21, 2002
Arnold Nerdly, FCAS, MAAA
Vice President & Consultant
$20,000
$15,000
$10,000
$5,000
$0
10
%
25
%
40
%
45
%
50
%
55
%
60
%
75
%
90
%
Losses
Products Liability
Probability
Losses
Expected Losses by Coverage
$50,000
$40,000
$30,000
$20,000
$10,000
$0
10% 25% 40% 45% 50% 55% 60% 75% 90%
Probability
PL
B'even (PL)
GL
B'even (GL)
AL
B'even (PL)
Total
B'even (Total)
Total ex AL
B'even (Total ex AL)
Quiet Please. Exam in Progress.
Nerdly’s explanation of natural logarithms:
I. Clearly establishes his mathematical prowess, thus lending
authority to the entire Captives study.
II. Is a blatant slap in the face to those of us who prefer curvy lines.
III. Is an unwelcome and unwise digression.
a.
b.
c.
d.
e.
I only
II only
III only
II and III
all of the above
Quiet Please. Exam in Progress.
Nerdly’s explanation of natural logarithms:
Correct Answer...
d. II and III
I. Clearly establishes his mathematical prowess, thus lending
authority to the entire Captives study.
II. Is a blatant slap in the face to those of us who prefer curvy lines.
III. Is an unwelcome and unwise digression.
Which of the following are not not not false?
I. Nerdly should be more honest about what he does & does not know
II. A rent-a-captive is not equivalent to borrowing a table for a party
III. Chip’s Uncle Miltie refers to him as “that snotty little Williams boy”
a.
b.
c.
d.
e.
I and II
I and III
II and III
all of the above
none of the above
Quiet Please. Exam in Progress.
Which of the following are not not not false?
Correct Answer...
a. I and II
I. Nerdly should be more honest about what he does & does not know
II. A rent-a-captive is not equivalent to borrowing a table for a party
III. You will definitely not learn everything you need to know about
captives by attending concurrent sessions at CAS meetings, not.
Which of the following are true?
I. There is no substitute for good preparation
II. There is no substitute for an M B A
III. It is critical to know your audience
a.
b.
c.
d.
e.
I only
(I or not II) and [ (I and III) or not III ]
(II and not III) or (not II and not I)
(I or III) and [ not II and not (I and III) ]
IV, had there been a IV to chose from
Must Think !
Must be smart !
I. There is no substitute for good preparation
II. There is no substitute for an M B A
III. It is critical to know your audience
a.
b.
c.
d.
e.
I only
(I or not II) and [ (I and III) or not III ]
(II and not III) or (not II and not I)
(I or III) and [ not II and not (I and III) ]
IV, had there been a IV to chose from
Quiet Please. Exam in Progress.
Which of the following are true?
Correct Answer...
b. (I or not II) and [ (I and III) or not III ]
I. There is no substitute for good preparation
II. There is no substitute for an M B A
III. It is critical to know your audience
CAS Spring Meeting
San Diego, CA
May 21, 2002
Can We Talk ?
Rose D. Barrett
Martin T. King
Richard O. Kirste
Mark Priven