PROCEEDINGS May 15, 16, 17, 18, 2005 - Casualty Actuarial Society

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256 WHEN CAN ACCIDENT YEARS BE REGARDED AS DEVELOPMENT YEARS?numerator of the equation for ˆp ij is the product of the total of thevalues above it and the total of the values to its left. Consequently,if the array were transposed (rows and columns interchanged),the numerator for ˆp ji would be unchanged (and of course thedenominator is also unchanged) from that for ˆp ij .
THE APPLICATION OF FUNDAMENTAL VALUATIONPRINCIPLES TO PROPERTY/CASUALTY INSURANCECOMPANIESWAYNE E. BLACKBURN, DEREK A. JONES, JOY A. SCHWARTZMAN,AND DOV SIEGMANAbstractThis paper explores the concepts underlying the valuationof an insurance company in the context of howother (noninsurance) companies are valued. Among actuaries,the value of an insurance company is often calculatedas (i) adjusted net worth, plus (ii) the presentvalue of future earnings, less (iii) the cost of capital.Among other financial professionals (e.g., chief financialofficers, investment bankers, economists), value is oftencalculated as the present value of future cash flows. Thispaper will discuss both methods and explain under whatcircumstances the two methodologies derive equivalentvalue and under what circumstances the results of thetwo methods diverge. This paper also addresses recentdevelopments in the insurance industry that could affectvaluation, including the NAIC’s codification of statutoryaccounting principles, fair value accounting, andthe Gramm-Leach-Bliley Act of 1999.ACKNOWLEDGEMENTThe authors acknowledge David Appel, Ph.D., Director of EconomicsConsulting Practice for Milliman, for his extensive contributionsto this paper.1. INTRODUCTIONValuation of a property/casualty insurance company is an importantfeature of actuarial work. Much of the work arises from257
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VOLUME XCII NUMBERS 176 and 177PROC
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FOREWORDActuarial science originate
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2005 PROCEEDINGSCONTENTS OF VOLUME
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2005 PROCEEDINGSCONTENTS OF VOLUME
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Editorial Committee, Proceedings Ed
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2 AN EXAMINATION OF THE INFLUENCE O
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10 AN EXAMINATION OF THE INFLUENCE
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AN EXAMINATION OF THE INFLUENCE OF
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RISKINESS LEVERAGE MODELSRODNEY KRE
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RISKINESS LEVERAGE MODELS 59APPENDI
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DISCUSSION OF A PAPER PRESENTED AT
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RISKINESS LEVERAGE MODELS 63known t
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RISKINESS LEVERAGE MODELS 79REFEREN
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RISKINESS LEVERAGE MODELS 81EXHIBIT
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ADDRESS TO NEW MEMBERS 151ateship a
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ADDRESS TO NEW MEMBERS 153You shoul
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ADDRESS TO NEW MEMBERS 155strength
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MINUTES OF THE 2005 CAS SPRING MEET
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MINUTES OF THE 2005 SPRING MEETING
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Volume XCII, Part 2 No. 177PROCEEDI
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ARCHITECTURE FOR RESIDENTIAL PROPER
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ESTIMATING THE WORKERS COMPENSATION
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INCORPORATION OF FIXED EXPENSESGEOF
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DISCUSSION OF PAPER PUBLISHED INVOL
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THE “MODIFIED BORNHUETTER-FERGUSO
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ADDRESS TO NEW MEMBERS-NOVEMBER 14,
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ADDRESS TO NEW MEMBERS 743Now to an
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PRESIDENTIAL ADDRESS-NOVEMBER 14, 2
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MINUTES OF THE 2005 CAS ANNUAL MEET
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MINUTES OF THE 2005 ANNUAL MEETING
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REPORT OF THE VICE PRESIDENT-ADMINI
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2005 EXAMINATIONS—SUCCESSFUL CAND
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OBITUARIESROBERT GRANT ESPIECLYDE H
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OBITUARIES 825SIDNEY M. HAMMER1931
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OBITUARIES 827J. GARY LaROSE1947—
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OBITUARIES 829PAUL J. SCHEEL SR.193
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OBITUARIES 831LEO M. STANKUSCirca 1
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INDEX TO VOLUME XCIIPage2005 EXAMIN
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835GRAVES, CLYDE H.INDEX—CONTINUE
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837INDEX—CONTINUEDREPORT OF THE V
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PROCEEDINGS May 15, 16, 17, 18, 2005 - Casualty Actuarial Society

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