SIGMA is pleased to announce the release of our newest educational resource, the Premium Deficiency Reserve Calculation sample. This resource provides an illustrative example of the calculation of a premium deficiency reserve (PDR). A company must record a PDR when the unearned premium of in-force business is not sufficient to cover the losses, loss adjustment expenses (ALAE and ULAE), and maintenance expenses (premium tax, other expenses, etc.) that will arise as premium is earned. Below are a few key additional considerations that should be reviewed when determining a PDR: Business Groupi ..read more

In a recent article published by Captive International, Michelle Bradley and Enoch Starnes discuss, “A Reflection on Data and Analytics for Captives". In it, they examine the business world’s reliance on data and analytics as decision-making tools, and how it has undoubtedly increased over the past two decades. Captive insurance has, of course, been no exception to this shift. One could even argue that the captives sector played a role in data’s rise to prominence within the risk strategy context, just as it has for many other innovations. With that in mind, the team at SIGMA take this oppo ..read more

In a recent article published by Captive International, Michelle Bradley and Enoch Starnes discuss, “Adapting Your Captive for a Shifting Risk Landscape". In it, they examine how a company’s risk profile can shift dramatically and without any warning. The impact of a global pandemic, a rising tide of shock verdicts, and an increasingly complex cyber landscape have changed insurance needs to a point which few could have predicted. What might have been easier to predict, however, was the resulting influx of companies in need of alternative risk financing solutions, such as captive i ..read more

January is here, and with it comes the need for many companies to complete their annual actuarial report for retained liabilities. If the past several years are any indicator, legislative changes and social inflation could significantly impact the loss reserves and projections prepared in these reports. Healthcare entities in particular could face the bulk of this activity, as evidenced by California's AB35 bill increasing the cap for damages on both a current and ongoing basis. SIGMA has many years of experience providing analytical services to healthcare clients, which are covered in our ..read more

Despite market uncertainty and numerous obstacles in the insurance industry this past year, the SIGMA team has persistently directed its focus towards growth, education, and delivering exceptional service to our clients. Fortunately, our dedicated efforts in these areas have not gone unnoticed, resulting in multiple accolades for our staff, both individually and collectively. This recognition serves as a reminder that the work we’re doing is important, and it also provides encouragement to push ourselves to be even better in the coming year. Over the course of 2023, SIGMA actively participate ..read more

Michelle Bradley and Enoch Starnes were recently featured in an article by Captive Insurance Times titled, "Going for Gold". Along with other industry leaders, they discuss 2023's captive market performance, trends and developments, and share predictions for the year ahead.  In regards to the year ahead, Michelle states in the article, “The sustainability of new entrants remains to be seen. One of the biggest challenges is making sure new captives are based on analytically supported strategies. Exiting the traditional market because of the pain of a hard market should be based on lo ..read more

One of SIGMA’s core objectives as an actuarial consulting firm is to reduce the perceived gap standing between insurance professionals and their ability to utilize actuarial analytics in their day-to-day work. All too often, this obstacle stems from of a lack of time, resources, or comfort in using more effective analytical approaches. Take, for example, the process of reviewing a company's risk financing options. When determining a large deductible or self-insured retention policy structure for their property and casualty risks, it is unfortunately quite common for the final decision to be b ..read more

The keys to a reliable actuarial analysis are good data and reasonable underlying assumptions for the program being analyzed. Therefore, any information regarding the insurance program which could materially affect the analysis should be provided to your actuary.   The two most common types of actuarial reports are the loss projection analysis and a reserve analysis. A loss projection analysis provides a range of confidence intervals around the projected losses in which the actual losses will lie. If the risk being analyzed is relatively stable, this type of analysis may only be co ..read more

In 2023, SIGMA conducted a collateral survey to assess, on a national basis, trends in collateral negotiations, exposures, reviews, arbitration, and many other factors. Since 2009, SIGMA has conducted this survey eight times which has allowed us to better understand both short-term and long-term trends. Collateral is especially important during times of financial uncertainty, such as the 2008 financial crisis, the COVID-19 pandemic and the 2023 banking crisis. Our most recent survey revealed several compelling insights. For example, 75% of respondents had carriers complete a scheduled co ..read more

When companies are determining a large deductible policy structure for their P&C risks, it is unfortunately all too common for the final decision to be based on “back of the napkin” calculations. This is often due to a lack of time, resources, or comfort in using more effective analytical approaches.  One of SIGMA’s objectives as an actuarial consulting firm is to reduce the perceived gap that stands between insurance professionals and their ability to utilize analytics in their risk-based strategies. Whether it stems from a lack of knowledge or access to helpful tools, we a ..read more