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Areas

Areas. Preparation of Schedule P Quantification of Liabilities Data Development, Storage, and Retrieval Interpretation of Historic Data. I. Schedule P. Old Classification For Schedule P For 1998, New Classification For 1999, Old Classification DCCP Contains Only “Allocated” Legal Fees

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Areas

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  1. Areas • Preparation of Schedule P • Quantification of Liabilities • Data Development, Storage, and Retrieval • Interpretation of Historic Data MBA Inc./Odell & Associates, Inc.

  2. I. Schedule P • Old Classification • For Schedule P • For 1998, New Classification • For 1999, Old Classification • DCCP Contains Only “Allocated” Legal Fees • DCCP Based on New Classification- Studies, Estimates • DCCP Based on New Classification – Compiled from Transaction Data MBA Inc./Odell & Associates, Inc.

  3. II. Reserves • “Loss” Triangles As Usual • Disregard 1997/1998 Development • Current Paid-To-Paid Ratio per New Definition Inception to Date • First Estimate of Ultimate Expenses is per new Classification Inception to Date • Adjust Ultimate Expenses for Excess of ALAE paid over what DCCP would have been • Need DCCP/ALAE Ratio MBA Inc./Odell & Associates, Inc.

  4. 3-E1

  5. 3-E2

  6. 3-E4

  7. II. Reserves Reserves from Split Data ULAE/AOP Calendar Paid-to-Paid Method • Divide data into two groups of calendar years • 1997 and prior • 1998 and later • Calculate AOP Liability separately for each group MBA Inc./Odell & Associates, Inc. 4

  8. 4-E3

  9. II. Reserves • Development Patterns for New Classification vs. Old Classification • Different makeup of data in Old/New Classifications Liabilities from Split Data Cautions MBA Inc./Odell & Associates, Inc. 5

  10. III. Data A Perfect World • List Types of Expense • Set up New Accounts • Review Old Accounts • Fix the software • Plan for the Schedule P Work • Plan for the Reserve Work • Continue to get Old ALAE/ULAE Data MBA Inc./Odell & Associates, Inc. 6

  11. IV. Interpretation of Historic Data Ideas • What does data mean? • Use portions that should have meaning • AY 1997 and prior: CY 1997 and prior • AY 1997 and prior: CY 1998 and later • AY 1998 and later • Do not cross “boundary” • Do not use data of doubtful meaning • Special Studies MBA Inc./Odell & Associates, Inc. 7

  12. IV. Interpretation of Historic Data Concerns • Companies did not change at the same time • Different changes being made • Given company may change from time to time • Inconsistencies between companies and within company over time MBA Inc./Odell & Associates, Inc. 8

  13. V. Observations • Reinsurance • ALAE/ULAE Data needed • Meaningful Data Series even after a number of years??? MBA Inc./Odell & Associates, Inc. 9

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