FCAS, MAAA
Principal and Consulting Actuary

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Derek W. Freihaut

Derek Freihaut is a principal and consulting actuary with Pinnacle Actuarial Resources, in the Bloomington, Illinois, office. He holds a bachelor’s degree in mathematics and economics from Rose-Hulman Institute of Technology in Terre Haute, Indiana. He has been in the property/casualty insurance industry since 2002.

Derek has considerable experience in assignments involving loss reserving, funding studies, loss cost projections, captive feasibility studies, risk transfer analyses, and personal and commercial lines ratemaking. He currently serves as chair on the American Academy of Actuaries (AAA) Committee on Property-Liability Financial Reporting (COPLFR).

Prior to joining Pinnacle, Derek was employed at a large insurance company, where his responsibilities included personal and commercial lines pricing. His pricing duties included private passenger and commercial auto, commercial multi-peril and rental program lines of business.

Publications and Media

Determining Risk Distribution
Best's Review Issues & Answers
Authored by Derek W. Freihaut.

January 2021 APEX Webinar
Statements of Actuarial Opinion (SAOs) at Year-End 2020
Authored by Derek W. Freihaut and Aaron N. Hillebrandt.

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Case Studies

Dedicated Fund Review

Dedicated Fund Review

Pinnacle was asked by a State Insurance Department to review the financial soundness of a State controlled, dedicated fund. The review consisted of establishing the State’s outstanding liabilities and future funding needs. Detailed historic exposure and loss experience were not readily available from the State because the program was administered by individual insurers. Pinnacle designed and conducted an industry data call on behalf of the State. The collected data was then used by Pinnacle in support of their analysis. As the data was still somewhat limited, additional industry data was gathered from other states to supplement Pinnacle’s analysis. Pinnacle then provided the State with a report detailing the determination of the estimated liabilities, the indicated rate changes, and recommendations on data capturing for enhancement on future studies.

Medical Malpractice PCF

Medical Malpractice PCF

Pinnacle has developed an excellent working knowledge of patient compensation and birth-related injury funds in many jurisdictions, including Florida, Indiana, New Mexico, Ohio, Virginia, and Wisconsin. In several of these states, we not only complete regular rate indications and loss reserve analyses, we are frequently involved in legislative costing of proposed laws that may impact the fund. These proposed laws have included addition, modification and removal of damage caps, changes to primary coverage limits, revisions to program eligibility or mandatory coverage requirements, and program benefits changes. In all of these states, policymakers have benefitted from Pinnacle’s expert analysis, understandable reports and insightful advice.

Retention Analysis

Retention Analysis

Pinnacle was asked by a large self-insured regional transportation authority to assess the impact of increasing their self-insured retentions for both workers compensation and automobile liability. We developed a stochastic simulation analysis, based on the program’s historical claims experience and industry benchmarks, that examined not only the increase in expected losses but the program’s additional potential loss variability. Finally, we discussed with the customer the relationship between their current capital position, as well as the current reinsurance market, to ensure the retention they selected for their program was appropriate for them. The authority ultimately increased their retentions, put some of their excess capital to work, and realized substantial savings in their reinsurance costs.

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