ACTL 1122 presentation

ACTL 1122
Tutorial
Presentation
Aaron Satyadasan, Kevin
Krahe

Agenda
 Background
 Claims Development Patterns
 Outstanding Claims Liability

Provisions
 Risk Margin Setting
 Correlation between Staff Numbers
and Liability Provisions

Overview of QBE’s Current
Situation

Asian
Typhoon
Season
Increase
in Claims

Staffing
Cutbacks

Capital
Efficiency

Implications on Outstanding
Claims Liability Provisions

Typhoons
cause
significant
damage

Long
Latency
Period:
Assessing
damage,
possible
legal action

Need for
more
Outstandin
g Claims
Provisions

QBE’s Risk Margin
Setting
Policy Mix

Correlation
Between
Products

SIZE OF
RISK
MARGI
N

Uncertaint
y in Central
Estimates

Correlation Example
Insurer A: Home & Contents Insurance and
Flood Cover
 Assume each claim payout costs $1000


Flood

• Home & Contents
Claim: $1000
• Flood Claim: $1000

No
Flood

• Home & Contents
Claim: $0
• Flood Claim: $0

$200
0

$0

Correlation Example
 Insurer

B: Life Annuities and Life
Insurance
 Assume each claim payout costs
$1000
•

Live
s
Dies

Annuity payment:
$1000
• Life insurance claim:
$0
• Annuity payment:$0
• Life insurance claim:
$1000

$100
0

$100
0

What will happen to claims
provisions if more staff are hired?

Less
More Claims
Processing Staff and Assessors
Outstandin
Hired
g Claims
More Incurred
Claims are settled within the
Provisions
financial period
Needed for
2013/14
Fewer Incurred
Claims require future
settlement

Challenges
Our

third group member
could not be contacted
Time constraints

.