AS463_Lec01 - ACTSC 463/863 Property and Casualty Loss...

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1 ACTSC 463/863 Property and Casualty Loss Reserving
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2 ACTSC 463/863 Chris Van Kooten > FCAS, FCIA > 8 Years of P&C Insurance Industry Experience > VP, Corporate Actuarial at Economical > 2011-2012 OCCA Executive
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3 ACTSC 463/863 Course Description > This course is focused on the practical aspects of Property and Casualty (P&C) Insurance in Canada. Through lectures, course notes and discussion, students will learn the principles of P&C claim handling and loss reserving, including the evaluation of standard reserving techniques.
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4 ACTSC 463/863 Grading Scheme Mid-term Exams 30% Final Exam 70% 100% Important Dates October 31 Midterm Email: vankootenc@gmail.com
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5 Introduction
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6 Introduction > Coverages • First-Party – Accident Benefits – Collision – DCPD – Comprehensive • Third-Party – Bodily Injury – Property Damage > Long-tail Versus Short-tail
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7 Introduction > Role of the Reserving Actuary • Obligation to Policyholders after the policy is sold • Accounting for Policy Liabilities – Balance Sheet (point in time) - Unearned Premium Reserve - Unpaid Claims and Loss Adjustment Expenses – Income Statement (flow) - Changes in balance sheet values
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8 The Claims Process
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9 Life of a Claim > Claim Reported • Various channels for reporting > Claims adjuster establishes an initial case reserve • Incurred loss = case outstanding • Internal versus External Adjusters • Multiple factors affecting size of case reserve depending on coverage • Several different approaches – consistency is key!!!
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10 Life of a Claim > Claim activity can extend for many years • Partial payments • Case Reserve Changes • Closings/Re-openings > Open Claim • Incurred loss = paid loss + case outstanding > Ultimately claim closes for the final time • Incurred loss = paid loss
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Life of a Claim > Example > Three separate calendar years affected Jan 6, 2009 Claim Reported: Paid = $0 Case = $1,000 Incurred = $1,000 Dec 1, 2008 Accident Occurs Paid = $0 Case = $0 Incurred = $0 Apr 10, 2009 New Information Paid = $0 Case = $10,000 Incurred = $10,000 Nov 12, 2009 Partial Payment Paid = $3,000 Case = $8,000 Incurred = $11,000 Feb 15, 2010 Claim Closes Paid = $15,000 Case = $0 Incurred = $15,000
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AS463_Lec01 - ACTSC 463/863 Property and Casualty Loss...

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