OSU Presentation Central Mutual Insurance Christina Germann Rick - PowerPoint PPT Presentation

OSU Presentation Central Mutual Insurance

Christina Germann

Rick van den Hengel

Agenda  Introduction to Central  Actuarial career choices  The exam process  Getting a job  What do actuaries do?  Q&A  Extra Info

Introduction to Central

Actuarial Career Choices  Consulting vs Insurance  Government Institutes  Banks  Environmental Organizations  Social Security  Hedge Funds  Sports teams  Disney World

Exam Preparation  Recommended study time - 100 hours per hour of exam  Exam process usually takes at least 5 years to complete (2 exams per year)  Tips:  Take a few months to study  Make a schedule, and stick to it  Leave the last month just for practice exams  Use Coaching Actuaries (ADAPT)  SOA vs CAS

The Exam Process Source: www.casact.org/admissions/process

Central’s Study Plan  30 hours of work time per hour of exam  No work on the day before or day of exam  Exam Registration and Materials  Seminars  Flexible Work Schedules

Getting a Job  Increasing your chances:  Internships  Pass exams  Extra skills  Research the company  Clean up your resume  Don’t be afraid to take the first step

Quiz: Name a movie that references Actuaries  Tron  Along came Polly  Saw VI

What do actuaries do?  Example #1:  100 auto policies  Total developed losses = $50,000  Expected Rate? $50,000 ൗ  $500 = 100

What do actuaries do?  Example #2:  50 cars  50 pick-up trucks  $20,000 of losses for cars  $30,000 of losses for pick-up trucks  What is the expected rate? $50,000 ൗ  $500 = 100 $20,000 ൗ  Cars = $400 = 50 $30,000 ൗ  Pick-up trucks = $600 = 50

Age • The crash rate for 16-year- olds is 3.7 times higher than drivers of all ages. • The crash rate for 16 to 19- year-olds is 2.7 times higher than drivers of all ages

Premium Factors  Base Rate  Based on the location  Primary rating factors  Age  Gender  Marital status  Vehicle  Secondary rating factors  Driver history  Number of cars insured  Other rating factors  Deductibles  Limits  Discounts

Final Premium Base Rate X Primary Factors X Secondary Factors

Base Rates Toledo $200 Cleveland $300 Van Wert $100 Columbus $300 Cincinnati $250

Primary and Secondary Factors Territory Base Rate Description Age Factor Car Type Factor Van Wert 100 Female, Single, Occasional 17 or less 2.50 '93 Dodge Intrepid 0.90 '16 Lamborghini Cleveland 300 Male, Single, Occasional 17 or less 3.10 5.20 Cincinnati 250 Married, Principal 25 - 64 1.00 ‘16 Toyota Prius 1.15 Columbus 300 Male, Married, Principal 65 - 70 1.75 Toledo 200 Female, Married, Principal 65 - 70 1.75 Number of Number of Cars Drivers Factor Description Age Factor 1 1 1.00 At Fault < 1 year 3.00 1 2+ 1.05 At Fault 1-2 years 2.50 2 1 0.90 Distracted Driving < 1 year 1.85 2 2+ 0.95 Distracted Driving 1-2 years 1.50 3+ 1 0.80 Reckless Driving < 1 year 4.00 3+ 2+ 0.85 Reckless Driving 1-2 years 3.25

Donald Trump  Married, 70-years old, principal operator  Lives in Cleveland  25 vehicles in the household with 2 drivers  Primary car is a 2016 Prius  Received ticket for reckless driving six months ago

Hillary Clinton  Married, 68-years old, principal operator  Lives in Toledo  10 vehicles in the household with 2 drivers  Primary car is a 2016 Lamborghini  Received ticket for distracted driving 2 years ago

Determine the premium for Trump  A: 300 x 1.75 x 1.15 x 0.85 x 4.00 = $2,052.75 Territory Base Rate Car Type Factor Description Age Factor Van Wert 100 '93 Dodge Intrepid 0.90 Female, Single, Occasional 17 or less 2.50 '16 Lamborghini Cleveland 300 5.20 Male, Single, Occasional 17 or less 3.10 Cincinnati 250 ‘16 Toyota Prius 1.15 Married, Principal 25 - 64 1.00 Columbus 300 Male, Married, Principal 65 - 70 1.75 Toledo 200 Female, Married, Principal 65 - 70 1.75 Number of Number of Cars Drivers Factor Description Age Factor 1 1 1.10 At Fault < 1 year 3.00 1 2+ 1.05 At Fault 1-2 years 2.50 2 1 1.00 Distracted Driving < 1 year 1.85 2 2+ 0.95 Distracted Driving 1-2 years 1.50 3+ 1 0.90 Reckless Driving < 1 year 4.00 3+ 2+ 0.85 Reckless Driving 1-2 years 3.25

Determine the premium for Clinton  A: 200 x 1.75 x 5.20 x 0.85 x 1.50 = $2,320.50 Territory Base Rate Description Age Factor Car Type Factor Van Wert 100 Female, Single, Occasional 17 or less 2.50 '93 Dodge Intrepid 0.90 '16 Lamborghini Cleveland 300 Male, Single, Occasional 17 or less 3.10 5.20 Cincinnati 250 Married, Principal 25 - 64 1.00 ‘16 Toyota Prius 1.15 Columbus 300 Male, Married, Principal 65 - 70 1.75 Toledo 200 Female, Married, Principal 65 - 70 1.75 Number of Number of Cars Drivers Factor Description Age Factor 1 1 1.10 At Fault < 1 year 3.00 1 2+ 1.05 At Fault 1-2 years 2.50 2 1 1.00 Distracted Driving < 1 year 1.85 2 2+ 0.95 Distracted Driving 1-2 years 1.50 3+ 1 0.90 Reckless Driving < 1 year 4.00 3+ 2+ 0.85 Reckless Driving 1-2 years 3.25

What do actuaries do? Females Males

What do actuaries do?  Revise the rating factor for single females:  $200M in premium  Breakeven loss ratio: 65%  Expected losses = $200M * 65% = $130M  Actual losses = $100M  $100M / $130M = 77%  New factor = 77% * 2.50 = 1.92

Any Questions?

Extra Info  Hiring forecast  1 full time in Personal Lines  1 full time in Commercial Lines  Contact information  cgermann@central-insurance.com  rvandenhengel@central-insurance.com

Home Insurance  Similar process:  Base rates  Rating factors  A large variety of events can occur  Hail storms  Wind storms (tornado/hurricane)  Winter weather  Theft  Fire  Many more