Many companies don’t believe that their retained liabilities are big enough or complex enough to warrant hiring an actuary. Therefore, internal calculations are often completed using spreadsheets or various software tools. In some situations, these calculations may give a reasonable range of retained liabilities. However, the magnitude of the losses, the number of years involved, […]
Summary: The Financial Accounting Standard Board’s (FASB) accounting update related to disclosures about short duration contracts (ASU 2015-09) requires that insurance entities disclose specific information related to the liability for unpaid claims and claims adjustment expenses. This information applies to captive insurance companies. Detailed information regarding the update can be found on the FASB.org website. […]
When a company begins the due diligence process for acquiring another entity, several actuarial factors must be considered. For risk related specifically to property and casualty, the main question needing to be answered pertains to the actual liabilities being acquired and how accurately they are being estimated. When the target company has maintained insurance programs […]
After attending the Fall 2015 Hawaii Captive Insurance Council meeting and the Spring 2016 CICA captive meeting, I became increasingly aware of the continued trend of placing non-traditional1 risks in captives. At SIGMA, we are seeing a growing number of captives formed with a sole focus on non-traditional risks. We are also noticing a large […]
Cyber risk is likely the most significant property casualty risk to emerge in recent times. Premiums for cyber risk are growing significantly, and daily headlines bring attention to yet another major data breach affecting an entity. Most of us with credit cards have probably had new cards issued because of a breach in the last […]
Many companies have a liability associated with retained losses through self-insured retentions or large deductible programs for a wide array of risks. These can include workers compensation, automobile liability, general liability, medical professional liability, and property. Most companies use an actuarial report to determine the net retained liabilities for these risks. However, many auditors and […]
In the last quarter of 2013, SIGMA Actuarial Consulting Group invited a group of insurance brokers, risk management consultants, and risk management staff of self-funded concerns to participate in a survey regarding collateral. This survey was similar to the ones conducted by SIGMA in 2009 through 2012. The goal of the survey was to assess, […]
In the last quarter of 2012, SIGMA Actuarial Consulting Group conducted a survey of insurance brokers, risk management consultants, and risk management staff of self-funded concerns to participate in a survey regarding collateral. This survey was similar to the ones conducted by SIGMA in 2009 through 2011. The goal of the survey was to assess, […]
Through a series of blogs, SIGMA has begun to address some common questions, requirements and issues based on our previous experience with clients and auditors. The first blog in the series focused on actuarial qualifications and an actuarial qualification statement. The second focused on auditor inquiries related to actuarial independence. This blog will address the […]
Current actuarial standards of practice indicate that multiple actuarial methods should be used to determine the estimated ultimate losses when completing an actuarial analysis of unpaid claim liabilities. One source of guidance related to actuarial methods and models is Actuarial Standard of Practice 43 (ASOP 43), particularly in Section 3.6.1. For example ASOP 43 states […]