Category Archives: Actuary

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