|
Services
We offer expertise in the following areas:
• Loss Reserves
•
Ratemaking & Filing Services
•
Self-Insurance & Captive Analysis
• Modeling
•
Staff Mentoring
•
Start-Up Feasibility Studies
Loss Reserves
As
the largest item on the liability sheet, reserves must be set with
great care. Studies show that weak reserves are the leading cause of
insurer insolvency. Companies with a strong and steady reserve
strategy can more easily withstand the ups and downs of market
cycles.
Our team of actuaries has many years of reserve experience across
all lines of insurance, with companies both big and small. We
currently serve as the year-end appointed actuarial firm to 25
companies as well as numerous other self-insureds and captives. Most
of our year-end clients are regional mutual insurers.
Our reserve reports have been acclaimed by companies and regulators
alike. A typical year-end report contains:
Technical exhibits.
Each exhibit is dedicated to a single method or statistic, with
frame and row numbers clearly identifying each set of data or
actuarial step.
Sample Exhibit.
Narrative.
Here we carefully explain the reasoning behind our assumptions
and reserve conclusions along with the major trends.
Executive Summary. Our colorful one-page reserve summary has been well received by
management as it quickly conveys our findings.
Sample Executive Summary.
Actuarial Opinion. This is the official document certifying that the carried reserves
are reasonable. Accompanying this document is the Actuarial
Opinion Summary.
We will also advise you on setting
the reserves during the year with a keen eye on the third quarter
reserves. We enjoy presenting our report to Boards of Directors as
it gives us a chance to interact with those who deal with reserves
at the highest level. back
to top
Ratemaking and Filing
Services
Pricing is as much an art as it is
a science. Knowing where the industry is in the market cycle is a
key element to setting rates. The Streff actuaries can guide your
company through different markets with their pricing know-how.
The starting point for a pricing analysis begins with a base rate
study. This helps determine the adequacy of the rates at the macro
level. Such a study restates the historical premium and losses to
the current level in order to overall determine the strength of the
rates.
Often it is too blunt to change everyone’s premium by the same
percentage. This can be accomplished only when the individual rating
factors are in balance. A more effective approach is to change the
rating factors and relativities (loyalty, payment method, claim
experience) to attract and retain the most profitable insureds.
We have helped companies implement credit scoring into their rating
structure by modeling the impact of credit scores. Other rating
parameters can also be modeled.
Finally, after management has signed off on the changes, the process
of filing the new rates and factors can begin. Our filing experience
can help make your interaction with the insurance department as
smooth as possible, as we offer technical and strategic support to
your filing.
back to top
Self-Insurance and Captive Analysis
The alternative marketplace
continues to gain popularity for large accounts with favorable loss
experience. Commercial lines are especially suitable to
self-insurance and captive formation.
Our proprietary reserve and forecasting models combine your
historical experience with industry benchmarks. We also infuse our
knowledge of the underlying exposure risks and loss trends
Based on advanced statistical techniques, our models have the
flexibility to present the findings at various confidence
percentiles, allowing you to choose the operating level that suits
your reserving strategy. Graphs and tables help convey our work in a
pleasing way. This gives our reports an extra purpose as they become
a reference tool for management throughout the year.
Years of experience has naturally led us to develop relationships
with brokers, TPA and regulators. These connections will help you
get the most out of your program.
back to top
Modeling
Modern computers have opened up
the field of modeling to allow the analyst to test scenarios like
never before, making it convenient for companies to operate at any
given level of confidence. This gives a extra level of depth to the
management process.
A typical modeling project takes a detailed claim file and fits a
statistical curve to the losses. This curve can then be used to
model a hypothetical future. Blending in other assumptions about
growth, expenses and the pricing environment, the modeled future
quickly takes shape. Models allow the user to simulate virtually
every possible future, and when all the futures are compiled, a
shape of the results emerges.
Modeling is useful in testing different reinsurance programs. For
example, say a company is interested in increasing its retention
limit from $150,000 to $200,000. Models can find the more profitable
retention. Or, perhaps a company is considering an aggregate or
quota share treaty. Both options can be modeled.
Dynamic Financial Analysis (DFA) is one of the more common types of
actuarial modeling and has generated a cottage industry of DFA
firms. This DFA
handout describes the process in detail.
The user can also stress test the surplus, BCAR or RBC ratios to see
at which point a high level of premium will impair these measures.
In fact, a model is only limited by one’s imagination.
back to top
Staff Mentoring
As insurance companies grow they
eventually look to build their own actuarial departments, even if
this means just one or two employees. These employees can benefit
from the guidance of the Streff actuaries, who can help ease this
transition. back
to top
Start-Up Feasibility Studies
The decision to begin a new
company or captive is exciting and challenging. There are questions
about pricing, capital and marketing strategy, to name just a few.
Then there’s the issue of timing and whether or not the market cycle
is favorable to a new entrant.
We can help sort out the complex process of starting a new company.
A feasibility study grades the vitality of your venture. Our
relationships with accounting firms, reinsurance brokers and other
vendors can help the process.
Modeling can play a valuable role in start-up analyses, as we can
replicate and test your business model well into the future.
Modeling allows you to select the confidence level at which you wish
to operate. This will give assurance to investors, reinsurers and
regulators alike.
If you’ve got a new idea for a company, consider a feasibility study
from us.
back to top |
