Enhancing Delivery of your Message Introducing new requirement

Enhancing Delivery of your Message Introducing new requirement standards

• • • Agenda Subject: Specific Opening: Context. Recommendation. Concise Body: Focused. Results over process. Concise Organization: Specific Headings Supporting Documents: Labeled, embedded Reference: URL or Document name Grammar: Introduce Abbreviations Flow: Transitions work with headings Closing: Technical and business context. Recommendation. Concise.

Body – Core of your work Start with a clearly stated business problem… • • Then package the Package the details to visualize and details to visualize support your and support your recommendation… recommendation Develop a statement of the business problem Key points developed in a logical manner Supporting evidence provided Reasoning clearly explained

Launch with a business statement… example 1 Some actuarial activities: Price/develop Reserve Evaluate performance Identify risk Manage risk Identify best practice Which task was…your Travelers email about? At Allianz, we hedge to mitigate the risk we take on when writing insurance products, including this FIA product we are modeling. KE 17

Launch with a business statement… example 2 The overall task for Travelers project is to set reserve As B. I. G. actuaries, we are responsible for analyzing the recent claims data for our Auto Liability line of insurance and pulling trends so that we might predict the way claims develop over several years for our company. … Should we mistakenly predict the claims development too high, the company will have more reserves than we need, and our money won’t be used as efficiently as possible. Should we predict the development too low, we face the issue of not having the reserves to pay out for claims as they come in. As such, it is imperative that we make a well-informed decision in choosing the method to predict our age to age factors for the future. JA 18

Opening: Concise (balance precise with not too wordy). • Precise wording avoids misinterpretation Before: “I have been analyzing the fee for service data. ” After: “As a part of our Florida Medicaid bid, I have analyzed our expected base medical costs before inflation, trend and Managed Care Savings. ”

Another precise wording example Before After Due to needing these tail factors and the issue of limited data for B. I. G. ’s Auto Liability, I had to research appropriate methodologies to calculate tail factors such that the company could set reserves accurately. To accurately predict future unpaid claims for B. I. G. ’s Auto Liability, appropriate methodologies were researched to select proper tail factors. SS 18

Flow: Results over Process Tip: Starting with the problem and steps taken: Cross-examining the unweighted averages of previous years' age-to-age factors with weighted averages emphasizing the more recent years did not produce a significant difference, indicating that there haven't been very significant changes since 2013. NEEDS REVISION … DIGEST and interpret the results: In the interest of setting accurate reserves, it was first necessary to select link ratios that followed the patterns of previous years. CS 18

Which of these Centers the message around the business problem? Story about the method… I decided to start by testing the schedules based on the industrywide historical lapse study compared to current Big Corp Financial policy assumptions which was all provided by our intern. Better Based on the industry-wide historical data on surrender schedules, I was able to test how the lapse rates of different schedules affected the current Big Corp Financial VA model. HBS 17

Tip: when topics are complex, leverage the caption Cumulative LDFs Before and After the Change original (at 100%) changed (at 70%) % of ultimate 1. 2 1 0. 8 0. 6 0. 4 0. 2 0 12 24 36 48 60 72 84 96 108 120 132 144 156 168 180 development (in months) Processing rate change (at 70%) leads to extended time to ultimate 3

Flow: Roadmap your logic As you know, estimation of the tail factor for Reported Auto Liability presented a challenge at B. I. G. because while Auto Liability losses are not yet fully developed at 60 months. In the interest of setting accurate reserves, it was first necessary to select link ratios that followed the patterns of previous years. Selection of the best method for tail factor estimation is essential to providing an accurate reserving suggestion. As you can see, there was no reason to suspect significant difference between the actual data and this approximation, making it a good candidate forming a reserving recommendation. In sum, using a model of exponential decay, the tail factor that I calculated for reported auto liability was 1. 024. CS 18

Organization: Headings. Modified Bondy Methodology To accurately predict future unpaid claims for B. I. G. ’s Auto Liability, appropriate methodologies were researched to select proper tail factors. Why the Modified Bondy Method The Modified Bondy method is simple, needs minimal extra calculations, and is effective for short-tail lines of insurance, especially those with limited or no data. CBS 17

Revision Example: Strong verbs Modified Bondy Methodology • Rough: Due to needing these tail factors and the issue of limited data for B. I. G. ’s Auto Liability, I had to research appropriate methodologies to calculate tail factors such that the company could set reserves accurately. • Final: To accurately predict future unpaid claims for B. I. G. ’s Auto Liability, appropriate methodologies were researched to select proper tail factors.

Supporting Documents: Title and caption options Accident Year 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Paid Indication 30, 573, 445 27, 487, 558 25, 493, 275 30, 082, 157 19, 300, 917 18, 938, 593 15, 151, 204 18, 567, 032 23, 551, 235 24, 867, 025 33, 938, 202 47, 413, 150 30, 732, 609 24, 551, 953 27, 027, 262 397, 675, 618 Reported Indication 30, 573, 445 27, 487, 558 25, 493, 275 30, 082, 157 19, 300, 917 18, 899, 880 15, 549, 205 19, 125, 676 25, 068, 743 24, 516, 834 38, 419, 747 51, 342, 336 41, 333, 299 35, 274, 406 44, 091, 504 446, 558, 983 Selected Ultimate 30, 573, 445 27, 487, 558 25, 493, 275 30, 082, 157 19, 300, 917 18, 919, 236 15, 350, 205 18, 846, 354 24, 309, 989 24, 691, 930 36, 178, 975 49, 377, 743 36, 032, 954 29, 913, 179 35, 559, 383 422, 117, 300 Figure 3: Selected Ultimate Losses for General Liability Line, B. I. G. , 1999 -2013 Data source: UMN Class Problem. xlsl AGF 14

Supporting Documents: Uncluttered Tip: Reduce significant digits when feasible MYS 16

Opening and Closing: Recommendation Tables Tip: Use a small table to organize mid-size recommendations 12 -24 6. 468 24 -36 2. 161 36 -48 1. 453 48 -60 60 -Ult 1. 236 1. 206 Selected LDFs from Reported DM 18 Tip: Use a general description of the recommendation when it is made up of a large data set

Closing The analysis gives the details, and the closing restates and summarizes My overall recommendation is thus to use BBB bonds for our proposal. I recommend an indexed cap of 4. 58%, which should yield an IRR of 15. 52% and a profit margin of 2. 49%, on average. In meeting both the profit and IRR goals, this policy should prove to be a valuable asset for the company moving forward. Please advise on any questions or concerns. I look forward to continued cooperation on this matter. Regards, Braden W. Mc. Dowell

Grammar Introduce all abbreviations My role in analyzing the loss experience for the Commercial General Liability (GL) using the unpaid claim estimation technique was to investigate the impact of reduced number of GL claims staff on future loss development. JK 18 Do a read-through!! "we did not fell as though we could properly asses" Student. S 13

New Rubric Requirements • Specific subject line mentions project and contribution Subject: B. I. G project – Paid Auto Liability Tail Factor CH 18 • Specific Headings and first transitional sentences support your flow of logic • Abbreviations are introduced • Word choice is precise but not too wordy Strong, active, descriptive words!!!!!