AS463_Lec05 - 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 Recoveries
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3 Recoveries > Salvage/Subrogation > Reinsurance • Quota Share – Treaty with pro-rata sharing of premiums and losses • Per-Risk Excess of Loss – Per-risk treaty where losses above a certain retention are ceded • Catastrophe Excess of Loss – Per-occurrence treaty where losses above a certain retention are ceded • Facultative – Non-treaty • Stop Loss
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4 Salvage & Subrogation > Valuation Methods • Data includes S&S i.e. negative payments – Analysis done on data net of S&S – Data often isn’t available for further analysis • Data excludes S&S – Can calculate salvage and subrogation explicitly and remove from total liabilities (actually an asset) - Directly apply development techniques - Apply development techniques to ratios of S&S to incurred/paid loss
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Reinsurance > Formulas • Gross = Direct + Assumed • Net = Gross – Ceded > Analysis can be done on direct, gross, net, ceded • Important to understand the structure of underlying reinsurance contracts when deciding how to analyze
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This note was uploaded on 02/08/2012 for the course ACTSC 463 taught by Professor Vankooten during the Fall '11 term at Waterloo.

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AS463_Lec05 - ACTSC 463/863 Property and Casualty Loss...

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