ThE YEAR ThAT WAS - Casualty Actuarial Society

president’sMESSAGE By Wayne Fisher Responding to Change H ello. I’m Wayne Fisher, and I’m only a health risk but a quality of life is- proud to be your new CAS presi- sue for the city’s two-legged inhabitants. we maintain our reputation as the most dent. I am especially honored In a city, horse manure can be a serious professional and respected casualty to assume this responsibility problem, but on a farm it's a good fertil- actuaries. We are the people behind during our very special centen- izer—and valuable. Some enterprising the credential that all of our stakehold- nial year. I especially like our motto for individuals proceeded to address the ers depend upon. This means taking our centennial celebration: 100 years of logistical challenges, which ultimately advantage of our broad offerings in Expertise, Insight and Solutions. led to a market to buy and sell horse continuing education programs, both as manure—a futures market of sorts. Not participants and attendees, and in help- vibrant, well-respected organization only was the city clean and comfortable, ing the CAS develop new ones to enable makes us well-positioned for the next money was being made. us to move into nontraditional areas The incredibly rich legacy of our As members, it’s imperative that 100 years. But these next 100 years will Then change came. where our actuarial skills will create new be very, very different and we as an Along came the streetcar and next opportunities. organization must respond and adapt the automobile, replacing horses for to what are new challenges, for both the transportation of goods and people. No CAS Strategic Plan on basic education, CAS and our individual members. We more horses. No more horse manure continuing education, influence and will need to move out of our comfort trading. A market that had sprung up to outreach, research, professionalism and zone and work together to provide the meet a pressing need quickly disap- member community. For basic educa- value our various stakeholders expect of peared. tion, we have more than 500 of our CAS members. Now our organization does not deal We have detailed objectives in our members working together on commit- Change is inevitable. It can come on in horse manure futures, but it now faces tees to validate the depth and breadth of slowly or quickly and be expected or not. a degree of competition and change that knowledge expected with our credential. Stephen Dubner, the best-selling author we haven’t experienced in our first 100 We also need to adopt new technologies of Freakonomics, provided an interest- years. Clearly we have some new chal- for delivery of the syllabus and valida- lenges. We must adapt. We must focus tion of the mastery of its content. Our on our core strengths and ensure that we future basic education offerings will a serious problem, but on a keep on meeting and exceeding the ex- include greater emphasis on statistics, farm it's a good fertilizer—and pectations of our members, employers, especially applications, as well as busi- regulators and others. We must remain ness and communication skills. In a city, horse manure can be the gold standard that all have come to valuable. count on. Our continuing education programs now provide the broadest opportuni- ing example of unexpected and rapid So, what are we doing? ties for staying abreast of contempo- change. Speaking during the American As an organization, we have a task rary developments. This year we will Academy of Actuaries’ annual meeting, force reviewing our structure. We have be partnering with general insurance which was held in conjunction with our over 100 committees and task forces actuaries internationally to ensure our annual meeting in Minneapolis, Dubner made up of volunteers working for the members have the benefit of different told the story of a peculiar market benefit of the CAS and each other. But perspectives and experiences, and to development in New York City. In the with 100-plus committees we need to support our members working outside late 1800s, the horse population in the ensure that we avoid duplication, ad- North America. Plans are underway to city was around 200,000. All these horses dress any gaps in meeting our objectives use technology more effectively to de- created a serious environmental prob- and use our staff most effectively. We liver our programs. We also will partner lem: tons and tons of horse manure. need to be nimble, responsive and ac- with nonactuarial organizations whose This excessive excrement was not 6 ACTUARIAL REVIEW cepting of change. President's Message, page 8 January/February 2014 www.CASACT.ORG

1.8 seconds from now, you’ll discover a major defect in the grip adhesive. And suddenly, the cost of goods sold jumps from 78 to 1,078. We are experts in risk. Arguably, the best in the business. But the world of product liability gives even us pause. You stopped making them years ago. You just acquired the retailer. A supplier made the defective part. It doesn’t matter. No one is safe anymore. All the more reason to know exactly where you stand. Or might stand, years from now. Did we mention, it’s complicated? Watch the film: Milliman.com/PL. www.CASACT.ORG January/February 2014 ActuariaL REVIEW 7

president’sMESSAGE memberNEWS President's Message tremendous asset, and we will use it to from page 6 benefit our members going forward. Professionalism in all we do is key expertise and programs will benefit our to maintaining the confidence that our members. various stakeholders have in us. Our Influence and outreach are critical Comings and Goings Jarrett Cabell, FCAS was recently CAS credentials represent the highest of named associate actuary for the Ameri- to reinforcing the value proposition standards. Working with the Academy, can Association of Insurance Services that our members bring unparalleled we will continue our efforts promoting (AAIS), a national advisory organization expertise and business judgment on awareness of our counseling and dis- that develops policy forms and rating issues related to risk. We will work with cipline processes and reinforcing with information used by more than 700 the American Academy of Actuaries and our members the need to adhere to the property/casualty insurers throughout other international actuarial, nonactu- highest standards. In this regard, we rely the U.S. Cabell held actuarial positions arial, and regulatory organizations to on each other. with Zurich, Allstate, Midwest Employ- spread the word about our expertise in We have a vibrant, active and en- ers and CNA before coming to AAIS. He risk. CAS members are also committed thusiastic member community—partly will be based in AAIS’s headquarters in to developing future members through due to our small size and specialization. Wheaton, IL where he will be concen- various university engagement activities. As we grow, we need to ensure that we trating on commercial lines pricing. know what our members expect and Wesley Griffiths, FCAS was ap- Recognizing where and how we value and how these expectations might pointed to the board of trustees of Gam- need to change, and embracing differ among various demographic seg- ma Iota Sigma, the international risk ments of our membership and candi- management, insurance and actuarial that change, will be the key to dates. We will develop new Regional science collegiate fraternity. Griffiths meeting the new challenges and Affiliates and Special Interest Sections to is second vice president and actuary, maintain the value of our shared inter- business insurance division for Travel- seizing the opportunities. ests and opportunities. ers Insurance. He also received the CAS We are in an environment of New Members award in 2013 (see story, (See Greg Wanner’s and Tamar Gertner’s change, with both challenges and op- articles on pages 11 and 12 for more portunities. We need to embrace the on Regional Affiliates’ activities in this need to adapt our organization to the ance today announced that Julie Le- regard.) new environment and be willing to take derer, ACAS has joined the department Research has long been a core page 13). The Missouri Department of Insur- risk in doing so. It won’t be easy; we’ve as the appointed Missouri property and strength of the CAS. We will continue been successful over the past 100 years casualty actuary. Lederer will support our partnerships with academia, domes- building our membership and expertise the divisions of insurance company tically and internationally, to publish in a fairly predictable environment. But regulation and insurance market regula- cutting-edge research and, in particular, recognizing where and how we need to tion. She previously served as a property practical applications. Throughout our change, and embracing that change, will and casualty actuarial consultant for 100-year history, we have developed be the key to meeting the new chal- Deloitte Consulting LLP in Chicago. the largest base of property-casualty lenges and seizing the opportunities. actuarial research. We will continue We have the resources: our deep pool of Company, a provider of property and to expand and promote our research volunteers and leaders and a dedicated casualty insurance for more than 100 publications to new audiences. We plan staff. I look forward to working with you years, announced the appointment of to make them more readily accessible on the journey. Brent Otto, FCAS, MAAA to vice presi- to our partners and ensure that our Together, let’s begin our path to the Amerisure Mutual Insurance dent of actuarial. Otto has been with members have access to similar research next 100 years with the purpose of mak- Amerisure for 11 years. In his new role, in other organizations. Our research is a ing it as successful as our first 100! Otto is responsible for Amerisure’s loss 8 ACTUARIAL REVIEW January/February 2014 www.CASACT.ORG

Calendar of Events and loss adjustment expense reserving, of the Society of Property and Casualty pricing analysis and predictive analytic Underwriters (CPCU) and the Profes- functions. sional Liability Underwriting Society Mt. Logan Re, Ltd. announced the Interactive Online Courses “Understanding CAS Discipline Wherever You Practice” “Introduction to Predictive Modeling” www.casact.org/education/ interactive/ March 30-April 1, 2014 Ratemaking and Product Management Seminar Marriott Wardman Park Washington, DC, USA March 30-April 4, 2014 ICA 2014 Marriott Wardman Park Washington, DC, USA May 21-22, 2014 Seminar on Reinsurance Grand Hyatt New York New York, NY, USA September 15-16, 2014 Casualty Loss Reserve Seminar Manchester Grand Hyatt San Diego San Diego, CA, USA November 9-12, 2014 CAS Centennial Celebration New York Hilton Midtown New York, NY, USA www.CASACT.ORG January/February 2014 (PLUS). appointment of David Whiting, FCAS, MAAA, CFA to the position of chief un- Email “Comings and Goings” items to ar@casact.org. derwriting officer. Whiting is a member Planning Your CE in this Centennial Year By Julie Stenberg, CAS Vice President-Professional Education P lan your continuing professional opportunity for CAS members to soak education activities in 2014 to up three days of P&C, ERM and profes- take advantage of the centen- sionalism sessions—or attend the full nial year’s special offerings and week and maximize opportunities to to recognize some important explore the latest thinking in life insur- changes to the familiar calendar of CE ance, pensions and employee benefits events. Following are some important and social security during the first half of highlights to consider. As each event the week. A full-week attendee can tap draws closer, you can access more up to 35 hours of CE for CAS members. details via the CAS Website’s Calendar Registration is now open, and options of Events. are available to attend the full week or 1. either half of the week. Register by Janu- RPM Seminar, Washington, DC, March 30-April 1, 2014. The popular ary 31, 2014, to avoid the late registra- Ratemaking and Product Management tion fees. Another popular option is to (RPM) Seminar structure will include register separately for the first half of the topics such as predictive modeling, week at RPM and the second half at ICA telematics, intelligent cars and data 2014. analysis. The seminar also will feature A special element of our centen- five optional pre-program full-day work- nial year, ICA 2014 is a partnership with shops on Sunday, March 30. Registration the other U.S. actuarial organizations to is now open; choices include attending host. Actuaries from all specialties and the Sunday workshops, or the Monday- from around the globe will be joining us. Tuesday seminar, or both. An attendee Won’t you join us for an event rich in op- registering for both elements can access portunities for personal and professional up to 22 hours of CE. growth? Washington D.C. is a great A special feature of the RPM Semi- venue for such a conference with its nar in 2014 is that it is scheduled during many museums, and monuments, and the same week and in the same hotel as the scenic beauty of its architecture and ICA 2014 (see below). Why not partici- springtime cherry blossoms! The last pate in both events? time ICA was held in the U.S. was more 2. ICA 2014, Washington, DC, March than 50 years ago, so be sure to make 30-April 4, 2014. The International Con- this once-in-a-career event a central gress of Actuaries (ICA) is an exceptional part of your 2014 CE plans. More details ActuariaL REVIEW 9

memberNEWS and registration can be found at www. 4. ica2014.org. York, May 21-22, 2014. Always rated Events for the full slate of 2014 offerings, 3. highly by those experienced and ac- and begin making your plans today! CAS Spring Meeting, canceled for Seminar on Reinsurance, New 2014. In order to maximize the number tuarial newcomers in reinsurance, the of CAS members able to attend ICA Seminar on Reinsurance will be orga- 2014 or the CAS Centennial celebra- nized by the CAS and Casualty Actuaries tion in November, the CAS will not hold in Reinsurance (CARe). Typically the a Spring Meeting in 2014. If you were Seminar on Reinsurance provides ap- considering attending the Spring Meet- proximately 13.5 hours of CE. ing in 2014 (and even if you were not 5. considering doing so), please select one San Diego, September 15-16, 2014. of the other memorable events that we Whether you are an experienced consul- are planning. tant serving as the Appointed Actuary Those earning the ACAS, FCAS or Casualty Loss Reserve Seminar, for several diverse clients, or have just seminars. See the online Calendar of D.W. Simpson Makes CAS Trust Donation T he Trustees for the CAS Trust are pleased to announce that D.W. Simpson Global Actuarial Recruitment donated 10,000 to the Trust in 2013. This brings the total contribution by D.W. Simpson to the Trust to 170,000 over the past CERA credential in the winter or spring rotated into your first position in the loss of 2014 can begin using their profes- reserving team at an insurance compa- several years. The CAS sincerely thanks sional credential according to the usual ny, the CLRS provides CE that is specific D.W. Simpson and its employees for its rules and timing constraints. At the CAS to the science and art of loss reserving. continued support of the CAS mission to Centennial celebration in November, we Following past successes, the CLRS will advance actuarial science. will introduce and celebrate the entire offer several tracks of sessions, allowing class of 2014. you to customize the seminar to your The CAS Spring Meeting, in the areas of responsibility and to your level usual format, is scheduled to return in of experience. Practitioners can access 2015. approximately 23 hours of CE at the Start Your New 6. the 2013 Discipline Committee CAS Centennial Celebration, New York, November 9-12, 2014. One hundred years ago, a handful of actuar- October 3, 2013—The CAS Rules of ies recognized that workers compensa- Procedure for Disciplinary Actions (as tion and other forms of P&C insurance amended May 3, 2009, by the Board of would require specialized knowledge, Directors) require an annual report by Experience! skills and tools. This is as true today as the Discipline Committee to the Board it was in 1914! Freshen and extend your of Directors and to the membership. Visit capabilities with the excellent content This report shall include a description of http://www.casact.org/ being planned for this special CAS An- its activities, including commentary on nual Meeting. Revel in the commemora- the types of cases pending, resolved and tive events throughout this once-in-a- dismissed. The annual report is subject lifetime meeting. Welcome the newest to the Confidentiality requirements. education/interactive to learn more about the new CAS Interactive CAS members—the “Class of 2014.” The Online Courses: Centennial meeting will provide up to 17 2013 Activity hours of CE, and unlimited memories. One case referred in 2012 is still pending and “Intro to Predictive Many other excellent CAS CE completion of additional investigation of choices are available in 2014, including information received after the Actuarial Modeling.” Regional Affiliate meetings, webinars, Board of Counseling and Discipline in- online offerings and limited attendance vestigation prior to convening a panel. “CAS Discipline Process” 10 CLRS. CAS Discipline Committee 2013 Annual Report to the Board By Tom Myers, Chairperson of ACTUARIAL REVIEW January/February 2014 www.CASACT.ORG

University Engagement in Action: MAF Sponsors Event at UW-Madison By Greg Wanner A current CAS objective is to modeling actuary for expand its outreach and engage- Sentry Insurance. ment activities with academics The panel and university students. Last covered a number October, the Midwestern Actu- of introductory sub- arial Forum (MAF), one of the CAS’s 14 jects, including an Regional Affiliates, set a good example overview of the CAS of how to reach out to students with an and MAF, the CAS’s event that took place at the University of admissions process, Wisconsin-Madison (UW). different types of The MAF meets semiannually to property/casualty conduct business and provide continu- products and the ing education opportunities for its mem- various roles CAS bers in areas such as actuarial methods, members assume insurance industry issues and develop- in their organiza- ments, and professionalism. With their tions. After these MAF Fall 2013 Meeting scheduled to opening remarks, the panel addressed take place in Madison, WI, MAF officers questions submitted in advance, such recognized a tremendous opportunity to as changes in the CAS’s preliminary connect with actuarial students and pro- education requirements and the paths mote the casualty actuarial profession at panel members followed to get into the UW. They decided to hold a program for casualty actuarial profession. The panel students prior to their MAF Fall Meeting. also answered follow-up questions on Made up of about 300 students, the Actuarial science students at the University of Wisconsin-Madison listen intently as the MAF panel discusses different aspects of casualty actuarial projects during an event held at the university on October 3, 2013. entirely new topics ranging from how UW’s actuarial science program is one statisticians and actuaries interact in of the largest programs in the U.S. and predictive modeling assignments to is recognized as a Center of Actuarial non-insurance applications for predic- Excellence. Elizabeth Merritt, MAF tive modeling. education officer and an actuary at During the comprehensive 75-min- Zurich North America, worked closely ute program, the panel also talked about with the UW Actuarial Science Club and typical actuarial work projects and faculty and arranged for the MAF to host not-so-typical projects, such as assessing a buffet dinner with a panel discussion. risk transfers for event insurance and Merritt was also a member of the panel coverage for celebrities. Throughout the along with J.J. Ihrke, MAF vice president evening the enthusiasm that each panel- and actuarial officer at Travelers Insur- ist had for their chosen line of work was ance, and Hyeji Kang, MAF secretary/ evident and impressed the 75 students treasurer and consulting actuary at who attended. PriceWaterhouseCoopers LLP. Round- “The panel members were all very ing out the panel was Sam Nolley, a UW engaging and shared many of their alumnus now working as a predictive p

VOL 41 / NO 1 / J ANUARY-FEbRUARY 2014 PUBLISHED BY THE CASUALTY ACTUARIAL SOCIETY ThE YEAR'S TOp ACTUARIAL STORIES —ANd phOTOS ONE mEmbER'S STORY OF ThE wAIT FOR A hEART . CASUALTY ACTUARIAL SALARY SURVEYS Articles in this issue include: W hy C ose a Retained Search?, DW Simpson Retained Job Openings,