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

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308 THE APPLICATION OF FUNDAMENTAL VALUATION PRINCIPLES[23] Yunque, Mark, and Len Goldberg, “Taxation Issues in Valuationof Property Casualty Operations,” Casualty ActuarialSociety Discussion Paper Program, 1989, pp. 217—258.
THE APPLICATION OF FUNDAMENTAL VALUATION PRINCIPLES 309APPENDIX ASAMPLE COMPANY VALUATIONThis section presents a detailed example of valuing a property/casualtyinsurance company. The modeled valuation will focuson² Modeling aspects of a property/casualty insurer given currentfinancial statements, investment assumptions, underwriting assumptionsfor current and future business, and loss and expensepayment assumptions;² Determination of future earnings from projected financialstatements based on selected surplus and business volume constraints;² Application of DCF and EVA valuation approaches usingan existing balance sheet and projected financial statementamounts (balance sheet, income statement, and cash flow exhibits);² Testing the sensitivity of indicated value to changes in key assumptions(risk-based capital-to-surplus requirement, loss ratios,investment yield, hurdle rate, and growth rate).Our objective is to provide a thorough and functional discussionof the valuation of a property/casualty insurance companyand a basic discussion of the development of earnings projections.The actuary or other professional preparing the valuationwill, of course, undertake extensive analysis to develop premium,loss, and expense assumptions, investment yields, and other factorsto project earnings. We present many assumptions “as given”without further explanation.A.1.Valuation Estimates Based on Financial Model ResultsThe valuation results for the sample company, Primary StockInsurance Company (PSIC), rely on two basic assumption sets:
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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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AN EXAMINATION OF THE INFLUENCE OF
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RISKINESS LEVERAGE MODELSRODNEY KRE
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RISKINESS LEVERAGE MODELS 33There a
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RISKINESS LEVERAGE MODELS 35where f
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RISKINESS LEVERAGE MODELS 37where a
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RISKINESS LEVERAGE MODELS 39Various
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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 65to be a
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RISKINESS LEVERAGE MODELS 67implies
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RISKINESS LEVERAGE MODELS 734. INTE
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RISKINESS LEVERAGE MODELS 79REFEREN
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RISKINESS LEVERAGE MODELS 81EXHIBIT
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RISKINESS LEVERAGE MODELS 83
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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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MODELING FINANCIAL SCENARIOS 179Bab
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WHEN CAN ACCIDENT YEARS BE REGARDED
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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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APPLICATION OF THE OPTION MARKET PA
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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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PRESIDENTIAL ADDRESS 747use of thes
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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—ADMI
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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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