washington state transit insurance pool actuarial report based on data evaluated as of june 30, 2008...
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PricewaterhouseCoopers September 30, 2008 Slide 3 Outstanding Claim Liabilities Accounting rules require a liability be established for unpaid claims Estimated cost to settle all outstanding claim obligations: -$6.9M as of June 30, $8.7M as of Dec 31, Actual cost will vary Implied fund balance is above the 95% confidence levelTRANSCRIPT
Washington State Transit Insurance Pool
Actuarial ReportBased on data evaluated as of June 30, 2008
Presented by:Kevin Wick, FCAS, MAAASeptember 30, 2008
PricewaterhouseCoopersSeptember 30, 2008
Slide 2
Agenda
• Outstanding Claim Liabilities- Confidence Levels
• Change Since Last Year• Review of Coverages• Other Issues
PricewaterhouseCoopersSeptember 30, 2008
Slide 3
Outstanding Claim Liabilities• Accounting rules require a
liability be established for unpaid claims
• Estimated cost to settle all outstanding claim obligations:- $6.9M as of June 30, 2008- $8.7M as of Dec 31, 2008- Actual cost will vary
• Implied fund balance is above the 95% confidence level
Total Reserves
0
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
30-Jun-08 31-Dec-08
Case Reserves IBNR Reserves ULAE Reserves Total Reserves
Slide 4 PricewaterhouseCoopers
September 30, 2008
Breakout of Outstanding Claim Liability by Coverage
81%
13%
3%
0%
3%
Auto Liability General Liability Auto Physical DamageProperty ULAE
Slide 5 PricewaterhouseCoopers
September 30, 2008
Components of the Net Change in Loss Reserves(Excluding ULAE)
Beginning Reserve – Dec 31, 2007 $6,154,000
New Losses Incurred 1/1 – 6/30/08 2,168,000
Payments Made 1/1 – 6/30/08 (982,000)
Changes in Ultimate Loss Estimates (675,000)
Ending Reserve – June 30, 2008 $6,665,000
New Losses Incurred 7/1 – 12/31/08 3,476,000
Payments Made 7/1 – 12/31/08 (1,678,000)
Ending Reserve – Dec 31, 2008 8,463,000
PricewaterhouseCoopersSeptember 30, 2008
Slide 6
Net Actuarial EstimatesAs of June 30, 2008Automobile Liability
0500,000
1,000,0001,500,0002,000,0002,500,0003,000,0003,500,0004,000,0004,500,0005,000,000
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
Paid Case IBNR Future Losses
PricewaterhouseCoopersSeptember 30, 2008
Slide 7
Net Actuarial EstimatesAs of June 30, 2008Automobile Liability
0500,000
1,000,0001,500,0002,000,0002,500,0003,000,0003,500,0004,000,0004,500,0005,000,000
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
Paid Case IBNR Future Losses
PricewaterhouseCoopersSeptember 30, 2008
Slide 8
Net Actuarial EstimatesAs of June 30, 2008Automobile Liability
0500,000
1,000,0001,500,0002,000,0002,500,0003,000,0003,500,0004,000,0004,500,0005,000,000
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
Paid Case IBNR Future Losses
PricewaterhouseCoopersSeptember 30, 2008
Slide 9
Comparison of Net Actuarial EstimatesAs of December 31, 2007 and June 30, 2008Automobile Liability
0500,000
1,000,0001,500,0002,000,0002,500,0003,000,0003,500,0004,000,0004,500,0005,000,000
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
Paid Case IBNR Future Losses
20072008
PricewaterhouseCoopersSeptember 30, 2008
Slide 10
Comparison of Net Actuarial EstimatesAs of December 31, 2007 and June 30, 2008General Liability
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
Paid Case IBNR Future Losses
PricewaterhouseCoopersSeptember 30, 2008
Slide 11
Comparison of Net Actuarial EstimatesAs of December 31, 2007 and June 30, 2008Auto Physical Damage
0
50,000
100,000
150,000
200,000
250,000
300,000
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
Paid Case IBNR Future Losses
PricewaterhouseCoopersSeptember 30, 2008
Slide 12
Comparison of Net Actuarial EstimatesAs of December 31, 2007 and June 30, 2008Property
010,00020,00030,00040,00050,00060,00070,00080,000
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
Paid Case IBNR Future Losses
PricewaterhouseCoopersSeptember 30, 2008
Slide 13
Comparison of Net Actuarial EstimatesAs of December 31, 2007 and June 30, 2008All Coverages Combined
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
Paid Case IBNR Future Losses
Slide 14 PricewaterhouseCoopers
September 30, 2008
Reserves to Equity Ratios
0.000.200.400.600.801.001.201.401.60
2001 2002 2003 2004 2005 2006 2007 2008
Benchmark Target: < 1.25
Slide 15 PricewaterhouseCoopers
September 30, 2008
Annual Losses to Equity Ratios
0.000.100.200.300.400.500.600.700.80
2001 2002 2003 2004 2005 2006 2007 2008
Benchmark Target: < 1.00
Slide 16 PricewaterhouseCoopers
September 30, 2008
Maximum Retained Loss to Equity Ratios
0%2%4%6%8%
10%12%14%16%
2001 2002 2003 2004 2005 2006 2007 2008
Benchmark Target: < 10%
Slide 17 PricewaterhouseCoopers
September 30, 2008
Equity and Change in Equity
$0
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
$14,000,000
$16,000,000
2001 2002 2003 2004 2005 2006 2007 2008
Benchmark Target for Percentage Change: > 0%
Equi
ty
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Perc
enta
ge C
hang
e in
Equ
ity