Experience Rating Methods Divided by an Ocean

This session will provide a comparison of basic experience rating calculations and methods used in the US and UK, as well as highlighting some newly developed methods for analyzing ground-up vs. excess trends using ILFs, and measuring the impact of COVID on expected losses in 2020.

Trending and developing claims are the cornerstone of experience rating. In this presentation, we will discuss several commonly asked questions including what period should be considered for inflation and how to assess the ‘maturity’ of claims reported and reserved late. We will provide an overview of a number of methods across regions for trending claims for inflation and methods for developing claims to ultimate in an excess of loss layer. Development methods that split IBNER and IBNR will be discussed. We will illustrate the important interconnection between severity and frequency trends on excess trend estimation, including the usage of various methods utilizing simulation highlighted in a submitted Variance article

The session will also include the impacts of COVID on the distortion of experience rating factors such as loss development, trend measures, and profitability indications during the various historical and projected phases of the COVID pause and the anticipated turnaround.

  • Date:Wednesday, June 9
  • Time:9:30 AM - 10:45 AM Eastern Daylight Time
  • Session Type:Concurrent Session
  • Session Code:CS9
  • Learning Objective 1::Comparing and contrasting different basic actuarial methods employed on both sides of the ocean
  • Learning Objective 2::Understanding the interconnections between severity, frequency, and increased limits factors on estimating excess trends
  • Learning Objective 3::How actuaries can approach handling the distorting effects of Covid
  • Level of Knowledge:Level 2: General knowledge of the subject
  • Moderator:Caitlyn Pace
Ana Mata
MatBlas Ltd
Marni Novack
Caitlyn Pace
Swiss Re
Justin Ranney
XL Reinsurance America Inc