Reinsurance plays a crucial role in helping insurance companies, known as cedants, manage risk and stabilize their financial portfolios. However, the complexity of reinsurance agreements between cedants and reinsurers creates unique actuarial challenges. Accurate reinsurance is essential for maintaining financial transparency, ensuring regulatory compliance, and managing risk effectively. This blog explores the challenges of reinsurance
Category Archives: Actuary
Mergers and acquisitions (M&A) are central to growth and expansion in the insurance industry. These complex transactions require the expertise of professionals to confirm financial transparency, regulatory compliance, and strategic alignment. This blog explores how accounting and actuarial analysis facilitates insurance M&A, from initial valuation to post-merger integration. Navigating Financial Complexity Insurance M&A transactions involve
Beyond the Failure Rate: How Psychology Impacts Service Contract Claims Lee Bowron, ACAS, MAAA John Kerper, FSA, MAAA When an administrator develops a new product, the actuary must simultaneously find a price that will be competitive in the marketplace, incentivize production, and provide enough funds to settle all the claims. While all these concerns are
The fluctuating dynamics of used car prices, auto financing, and insurance markets are making GAP landscape navigation increasingly challenging. Here’s what you need to know: Used Car Prices: Post-pandemic shifts caused a decrease in used car valuations, affecting GAP losses, especially in contracts issued in the last 2 years. Auto Financing: Rising interest rates are
GAP – Where Are We? Lee Bowron, ACAS, MAAA John Kerper, FSA, MAAA Navigating GAP exposures in 2023 is proving to be a challenge for those attempting to gauge potential future losses from GAP contracts. The foundation of all GAP claims lies in a total loss incident. Such an incident hinges on both a
What is ASC 606? ASC 606 has had a major accounting impact for any entity which receives contingent commissions or “Retros”. In general, you are required to recognize any estimated future commissions or retrospective payments as revenue at contract inception. It may also apply if you have an excess contractual liability policy and
Recent inflationary pressures are causing administrators to adjust rates for Vehicle Service Contracts (VSCs). The U.S. Bureau of Labor Statistics reported that inflation for motor vehicle parts was +14.9% year-over-year in June 2022. Are You Ready to Change Rates? VSC pricing changes may not be common in your organization. Loss ratios for many administrators have
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When we last checked in on GAP, there were significant improvements in costs. Used car prices clearly bottomed in late 2008. There has…
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When we last checked in on GAP, there were significant improvements in costs. Used car prices clearly bottomed in late 2008. There has…