Actuarial Outpost
 
Go Back   Actuarial Outpost > Actuarial Discussion Forum > Careers - Employment
FlashChat Actuarial Discussion Preliminary Exams CAS/SOA Exams Cyberchat Around the World Suggestions

DW Simpson Global Actuarial & Analytics Recruitment
Download our Actuarial Salary Survey
now with state-by-state salary information!


Reply
 
Thread Tools Search this Thread Display Modes
  #41  
Old 09-09-2014, 11:41 PM
yonatan yonatan is offline
Member
CAS
 
Join Date: Jan 2012
College: University of the Hard Knocks
Posts: 42
Default

Quote:
Originally Posted by therealsylvos View Post
I figured, I was making a joke. Although now that I'm engaging with you I may as well ask, if you're a pricing actuary for a reinsurer, how different is that from primary pricing? For the excess layers I can only assume the only word to describe your data is "sparse", and for treaty reinsurance you're just getting a percentage of the primary, so what's involved on that side of things?
For Excess, It tends to be a matter of weighing the rate you get based on experience vs exposure. Exposure is based on the company's profile; ie their results, where they write business and the type of business they have. Lower layers often have enough loss experience so you have to rely less on exposure. Middle layers have less loss history; so more credibility goes to the exposure rate. Cat layers with very little to no loss history are generally priced on a rate on line basis with the help of cat modelling software. But that is the purely technical part. One also has to qualitatively assess changes to the book of business or business environment in question and evaluate whether price increases/decreases are in order.

For proportional treaties, it's a matter of projecting ultimate loss ratios and seeing whether the commission structure will result in the desired profit
Reply With Quote
  #42  
Old 09-10-2014, 04:43 AM
ecosi ecosi is offline
 
Join Date: Sep 2011
Posts: 4
Default

Quote:
Originally Posted by yonatan View Post
For Excess, It tends to be a matter of weighing the rate you get based on experience vs exposure. Exposure is based on the company's profile; ie their results, where they write business and the type of business they have. Lower layers often have enough loss experience so you have to rely less on exposure. Middle layers have less loss history; so more credibility goes to the exposure rate. Cat layers with very little to no loss history are generally priced on a rate on line basis with the help of cat modelling software. But that is the purely technical part. One also has to qualitatively assess changes to the book of business or business environment in question and evaluate whether price increases/decreases are in order.

For proportional treaties, it's a matter of projecting ultimate loss ratios and seeing whether the commission structure will result in the desired profit
Wow, this is really interesting, thank you! Is cat modelling software beyond the remit of actuarial work? Or do you get actuaries from places like Towers Watson who do it?
Reply With Quote
  #43  
Old 09-10-2014, 04:44 AM
ecosi ecosi is offline
 
Join Date: Sep 2011
Posts: 4
Default

Thanks to everyone who's replied, and glad there's been a nice discussion going on
Reply With Quote
  #44  
Old 09-10-2014, 08:35 AM
Beach Bum Beach Bum is offline
Member
CAS AAA
 
Join Date: Dec 2005
Location: Currently away from an Ocean
Favorite beer: Alpha King
Posts: 1,998
Default

Quote:
Originally Posted by ecosi View Post
Wow, this is really interesting, thank you! Is cat modelling software beyond the remit of actuarial work? Or do you get actuaries from places like Towers Watson who do it?
Most/all reinsurers have cat modeling capabilities that generally begin with the main three vendors: AIR, RMS, Eqecat. In- house cat modeling teams can vary especially by size depending on reinsurer staffing and needs, some can outsource all of this work directly to say RMS if needed.

Brokers are some of the biggest users of the software (Aon, Willis, etc). Consulting shops like TW won't have as much expertise in cat modeling as actual cat modeler for say Aon or a reinsurer like Swiss Re. Though my guess is large consultancies are advancing their services to include cat modeling support just cause it can be a revenue stream.

As an actuary you can certainly get involved or have overlap with modeling but it will depend where you work. I feel that as an actuary you get exposed to more, especially other pertinent parts of the insurance/reinsurance business that cat modelers themselves won't (pricing or reserving,etc).
Reply With Quote
  #45  
Old 09-10-2014, 08:59 AM
Sine Language's Avatar
Sine Language Sine Language is offline
Member
CAS AAA
 
Join Date: Aug 2014
Location: :usa:
Studying for the kids
Favorite beer: Whiskey, Irish
Posts: 3,597
Blog Entries: 3
Default

Quote:
Originally Posted by Beach Bum View Post
Though my guess is large consultancies are advancing their services to include cat modeling support just cause it can be a revenue stream.
We started using cat modeling purchased from a large consulting firm, and I imagine it's quite profitable for them to do seeing as they already have the cat modeling capabilities, why not just sell the same reporting to someone else while maintaining any proprietary elements they deem valuable enough not to share.
__________________
Quote:
Originally Posted by Colonel Smoothie View Post
I am a special flower
Disclaimer: This post is likely sarcastic in nature and in no way represents Sine Language's actual opinion and sentiment
Reply With Quote
  #46  
Old 09-10-2014, 09:03 AM
formose's Avatar
formose formose is offline
Member
CAS
 
Join Date: Jun 2012
Studying for yolo
Posts: 878
Default

can someone post the whole actuarial food chain i need it for future reference for ad hominem attacks
Reply With Quote
  #47  
Old 09-10-2014, 09:18 AM
Idioteque's Avatar
Idioteque Idioteque is offline
Member
CAS AAA
 
Join Date: Apr 2012
Posts: 988
Default

Quote:
Originally Posted by yonatan View Post
Lol, you know how tired you are of having to explain what an actuary is? I have to explain that and what reinsurance is.
Reply With Quote
  #48  
Old 09-10-2014, 09:35 AM
yonatan yonatan is offline
Member
CAS
 
Join Date: Jan 2012
College: University of the Hard Knocks
Posts: 42
Default

Quote:
Originally Posted by Beach Bum View Post
Most/all reinsurers have cat modeling capabilities that generally begin with the main three vendors: AIR, RMS, Eqecat. In- house cat modeling teams can vary especially by size depending on reinsurer staffing and needs, some can outsource all of this work directly to say RMS if needed.

Brokers are some of the biggest users of the software (Aon, Willis, etc). Consulting shops like TW won't have as much expertise in cat modeling as actual cat modeler for say Aon or a reinsurer like Swiss Re. Though my guess is large consultancies are advancing their services to include cat modeling support just cause it can be a revenue stream.

As an actuary you can certainly get involved or have overlap with modeling but it will depend where you work. I feel that as an actuary you get exposed to more, especially other pertinent parts of the insurance/reinsurance business that cat modelers themselves won't (pricing or reserving,etc).
This pretty much sums it up. From a pricing perspective, the brokers work with the cedants to prepare the data that goes into AIR/RMS. The reinsurers then use the data as they wish. Cat modeling that is done by reinsurers themselves is more for measuring the company's own accumulations, and for retro purposes.
Reply With Quote
  #49  
Old 09-10-2014, 09:40 AM
yonatan yonatan is offline
Member
CAS
 
Join Date: Jan 2012
College: University of the Hard Knocks
Posts: 42
Default

Quote:
Originally Posted by ecosi View Post
Wow, this is really interesting, thank you! Is cat modelling software beyond the remit of actuarial work? Or do you get actuaries from places like Towers Watson who do it?
The cat models basically spew out expected losses of different perils for the treaty based on the data inputted. I don't have any expertise in delving deep in the data, I just rely on the work the brokers did.
Reply With Quote
  #50  
Old 09-10-2014, 09:41 AM
Idioteque's Avatar
Idioteque Idioteque is offline
Member
CAS AAA
 
Join Date: Apr 2012
Posts: 988
Default

Cat modelers are typically extremely well-versed in the main vendors' CAT modeling software (RMS, AIR, etc.), the current trends in major weather-related perils across the regions they are concerned with (Hurricanes, Tornadoes, Winterstorm, Earthquake), and are usually skilled at manipulating data in Access and Excel (the reason being to scrub insurer data for input into the models themselves).

Actuaries in reinsurance are the ones diving into the data and understanding the implications on pricing and reserving for the treaties themselves, which can encompass a wide range of insurer products. Working at a reinsurance broker, you get exposure to and need to comprehend a wide range of LOBs (workers' comp, excess casualty, property, marine, professional lines to name a few) and work with the broker to price and design reinsurance treaties on the clients' behalf (insurance company).

Broking actuaries tend to have the reputation in the reinsurance marketplace of painting a biased picture of the client when making assumptions with the data; since the data used in reinsurance is usually sparse, assumptions often need to be made to transform it into a usable form. Because of this, the reinsurer's actuary will come in with a higher "technical" price for a treaty (this price is based off an analysis of the potential losses to the treaty during the treaty period), the broking actuary will come in lower, and then they will hash out their assumptions until reaching an agreement in the middle. I don't think this is as much the case anymore as brokers have an incentive to provide a valid estimation to maintain their reputation in the marketplace.
Reply With Quote
Reply

Tags
career advice, if you ain't ballin, imo you need to quit!!!, reinsurance

Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off


All times are GMT -4. The time now is 12:44 AM.


Powered by vBulletin®
Copyright ©2000 - 2020, Jelsoft Enterprises Ltd.
*PLEASE NOTE: Posts are not checked for accuracy, and do not
represent the views of the Actuarial Outpost or its sponsors.
Page generated in 0.48393 seconds with 9 queries