Nicholas Gurgone
Gregory W. Fears, Jr.
Ken J. Hawkins
Daniel Linton
Aaron N. Hillebrandt
Timothy C. Mosler
Arthur R. Randolph II
Robert J. Walling III
Jordan R. Paszek
Laura A. Maxwell
Christopher J. Schubert
Joseph A. Herbers
Derek W. Freihaut
Darcie R. Truttmann
Erich A. Brandt
The consulting team truly understands our business and the factors which affect it.
Pinnacle consultants deal with auditors daily, assisting them in serving their customers and evaluating the work products of other actuaries.
Pinnacle strives to construct benchmarks for any analysis, whether ratemaking, loss reserving or some other use, as close as possible to replicating the nature of the underlying data being reviewed.
Pinnacle provides loss reserve analyses and other diagnostics in support of collateral negotiations associated with deductible and/or self-insured retentions.
Assessing the reasonableness of indicated loss and loss adjustment expense reserves after the analysis is completed is an essential element of the loss reserve analysis. In particular, measures such as loss ratios, changes since the prior evaluation, implied claim frequencies and severities and costs per unit of exposure are a few of the diagnostic tests employed when considering the reasonableness of indicated reserves.
Management sometimes wishes to reflect the time value of money in funding projections, accruals for unpaid claims liabilities and other valuations. The two most important parameters for doing so are the assumed interest rate and the underlying claim payment pattern. Assessing reasonable values for these parameters is not trivial as the interest rate may need an adjustment for risk while the claim payment pattern may not be readily available.
Loss reserving is a process of estimating reasonable accruals for the unpaid loss and loss adjustment expenses that must be posted on a balance sheet. As this is often times the largest liability in a company’s financials, the accrual has a very significant impact on income and surplus (or net worth).
Pinnacle tailors our analysis of indicated reserves to your particular situation. Our loss reserve analyses are used to support statements of actuarial opinion (SAOs), audit opinions, financial examinations, insurance company liquidations and rehabilitations and as expert opinions in lawsuits. We rely on a wide variety of traditional actuarial methods to develop reasonable estimates of unpaid claims liabilities. The results of such a study can be stated as a point estimate, a reasonable range of outcomes or as a statistical distribution of all possible outcomes. There are many factors that influence the analysis of indicated reserves, including internal factors such as safety programs, loss control efforts or management changes.
There are external influences as well - regulatory/judicial climate, the economy or weather patterns. Our consultants spend considerable time and effort to understand the unique climate in which your company operates before customizing our analysis to include the real world influences likely to influence the true accrual for unpaid claims liabilities. We also have significant expertise with insurer liquidators and rehabilitators.
Our experience with property/casualty insurance programs is both broad and deep, with no two programs alike. From financial analysis of companies and their management to expert witness testimony regarding our findings and recommendations, you can rely on our support.
July APEX Webinar Causes of Recent Reserve Development Authored by Erich A. Brandt and Gregory W. Fears, Jr..
December 2019 APEX Three Perspectives on Peer Review Authored by Erich A. Brandt and Darcie R. Truttmann.
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Bermuda SAO More »
Pinnacle provides the loss reserve analysis and statement of actuarial opinion to the Bermuda-domiciled captive of a major national long haul trucking company for over a decade. This reserve analysis examined the captive's coverages for excess automobile liability coverage, deductible reimbursement under a large deductible workers compensation policy and cargo liability and physical damage coverages. The analysis utilized both company loss development triangles and industry benchmarks. Once the reserve analysis was completed and discussed with the client, the statement of actuarial opinion was produced to comply with regulatory requirements. Our excellent working relationship with the captive’s auditors simplifies the work of both firms on behalf of the captive.
Company Valuation Model More »
An international financial services holding company wished to become the sole owner of a company in which they had a substantial minority interest. One of our consultants designed a stochastic valuation model projecting dividend streams several decades into the future. One of the more interesting features of this model is that it did not merely arrive at a point estimate of the value of the firm but applied various assumptions to calculate a range of values. The assumptions were discussed in advance with management and the model produced a probability distribution of the value of the firm. This allowed the client to determine the likely return for a given purchase price, improving the decision making process that led to the holding company obtaining full ownership of the subsidiary.
Florida Department of Financial Services More »
The Florida Department of Financial Services (DOFS) oversees and administers the runoff of domestic Florida insurance companies in rehabilitation. Typically, when a company's financial condition is perilous, the DOFS obtains court orders to oversee the company’s administration and manage the orderly adjudication of all unpaid claims liabilities.
Measuring the extent of those claims liabilities involves uncertainty as to the number and severity of those claims. Further complicating the issue relates to the attitudes of claimants and their attorneys as regards to settlement of such claims knowing the company itself is under regulatory supervision.
We assisted the DOFS in a formal way with the runoff of three nonstandard auto writers, all part of a company group. The nature of the exposure was such that the unpaid claims were dominated by bodily injury and property damage liability claims. Our modeling of the anticipated future settlements considered input from company claims representatives, the DOFS itself and the company’s auditors.
At the outset of the assignment, the company’s surplus was impaired significantly. During the process, the DOFS was able to achieve significant concessions on the part of claimants given the uncertain financial condition of the carriers involved. The outcome was when the last claim was paid, the company shell that remained had a positive surplus balance.
At Pinnacle, we partner with you to explore whatever path it takes to find the answers you need.
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October 02, 2022 AGRiP Staff Forum
October 09, 2022 SIIA National Educational