Wednesday, March 7 • 10:45am - 11:30am
Resetting Your Contribution Algorithm

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In most pools, rating formulas and underwriting guidelines have evolved over time in response to changes in risk characteristics, market conditions, member expectations, and management objectives. Often, the source and purpose of various risk quantification elements cannot easily be identified or remembered. The consequence of these cumulative changes is that individual member contributions no longer align with the risks borne for each pool member, even if the underwriters “follow the formula” and the overall funding number is adequate. How can pools respond to questions raised by regulators, underwriters, or members with respect to levels of individual contributions? In this presentation, we will discuss scenarios that may prompt a review of the current funding allocation. We will then describe ways to evaluate current funding allocation as well as methods available to determine the best redistribution of total funding. Finally, we will discuss implementation considerations, benefits, and possible consequences.

avatar for Chris Kogut

Chris Kogut

Principal and Consulting Actuary, Milliman, Inc.
Chris Kogut is a Principal of Milliman, Inc., a global actuarial consulting firm. Chris is a Fellow of the Casualty Actuarial Society (“FCAS”) and a Member of the American Academy of Actuaries (“MAAA”).Chris has more than 20 years of actuarial consulting experience. She focuses... Read More →

Wednesday March 7, 2018 10:45am - 11:30am
Sapphire OP