Category: Loss Development and Trend

Workers Compensation Benchmark Loss Projections

Calculating a benchmark loss projection for workers compensation requires two key pieces of data:  loss costs and payroll, each broken down by state and class code.  While payroll amounts are typically available to companies from internal sources, loss cost information must be gathered externally. Currently, thirty-four states around the US engage NCCI as their advisory […]

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Year-end 2021 Actuarial Report Prep

November is here, and the time is quickly approaching for most companies to complete their annual actuarial report for retained liabilities. As you begin preparing for your company’s year-end 2021 analysis, review the list of tips below to help ensure this process is smooth and effective. Do you need reserve analysis numbers in early January? […]

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Reserve Reconciliations

Most companies and their consulting actuaries complete an actuarial analysis annually at minimum in order to assist in determining booked reserves for outstanding losses & LAE in their year-end financial statements. As the estimates are revised year to year, management may seek to isolate and review specific items attributing to any changes in these reserves. […]

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Components of a Loss Analysis

A workers compensation loss analysis can be utilized in a number of ways depending on the situation and needs of the user. Reserve certification, satisfaction of self-insurance requirements, negotiation of security requirements and letters of credit, insurance budgeting, and determining the reasonability of quoted insurance costs are all common uses. Loss development serves as the […]

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The Bornhuetter-Ferguson Method

Actuaries will use multiple actuarial methods to determine the estimated ultimate losses when completing an actuarial analysis of unpaid claim liabilities. The Bornhuetter-Ferguson (B-F) method and the development methods (also known as chain ladder methods) are two of the most popular claims reserving methods. In this blog post, we will take a look at the […]

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Knowing the Risks of Using Internal Calculations

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, […]

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The Balance of Quantitative Measures and Qualitative Information, a Community Effort

Early last year, I visited the USS Midway Museum in San Diego. The museum offers tours of the decommissioned aircraft carrier, led by docents, many of whom served on the USS Midway or another vessel. As I toured the bridge and entered the chart room, the docent recalled the various measures for determining the carrier's […]

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Silent Evidence

What is silent evidence? How can I look for it? What benefit does it provide? As technology advances, companies are continuing to get better and better at capturing, manipulating, and examining data. One of the many results of this improvement is that the ability to differentiate your approach to risk management from others is gradually […]

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The Analytically Based – Data Driven Broker: Loss Cost Analysis

Blog 1: Intro to SIGMA & Scope and Data RequirementsBlog 2: Loss Development FactorsBlog 3: Reserve and Cash Flow AnalysesBlog 4: Trending, Pure Loss Rates, and Loss ProjectionsBlog 5: Confidence Interval and Retention Level AnalysesBlog 6: Loss Cost Analysis Our prior blog post dealt with confidence intervals and retention level analyses, both of which rely heavily on loss projections. To produce […]

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Confidence Interval and Retention Level Analyses

Blog 1: Intro to SIGMA & Scope and Data Requirements Blog 2: Loss Development Factors Blog 3: Reserve and Cash Flow Analyses Blog 4: Trending, Pure Loss Rates, and Loss Projections Blog 5: Confidence Interval and Retention Level Analyses Blog 6: Loss Cost Analysis In our last post, we spent a bit of time dealing […]

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