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

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

November APEX Webinar
State of the Florida Homeowners Market
Authored by Derek W. Freihaut and Arthur R. Randolph II.

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Case Studies

Captive Dividend Assessment

Captive Dividend Assessment

An onshore, single parent captive was concerned with the amount of retained earnings and wanted to establish a policy for the minimum capital for the program to trigger dividend distributions. Pinnacle compared the program’s capitalization to a wide variety of industry standards for similar programs from rating agencies, regulators, and other sources. The results of this analysis lead to a recommended board policy regarding a minimum capital threshold for dividend distributions and ultimately to a significant dividend being declared to the parent company.

Catastrophic Risks

Catastrophic Risks

Pinnacle was retained by an insurance company specializing in catastrophic risk to identify and test alternative sources of risk financing capacity including traditional reinsurance and catastrophe bonds. In order to complete the project, Pinnacle designed a dynamic financial model to determine the cost/benefit of alternate risk financing strategies.

Rate Indications / Filings

Rate Indications / Filings

A regional carrier came to Pinnacle wanting to implement an insurance score program along with rate indications for home, auto and farm. Pinnacle developed rate indications for each line, and developed an underwriting scorecard rating approach using insurance score as a critical component. The combination of implementing appropriate rates and the new rating plan enabled this company to turn their business around, become profitable and rebuild their surplus position.

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