Federal Crop Insurance Ratemaking and Profitability Projections Casualty Actuarial Society Seminar on Ratemaking San Antonio Marriott Rivercenter San Antonio, Texas March 27-28, 2003 COM-7 Richard Bill, FCAS Country Insurance & Financial Services Whose Line is it Anyway?
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Federal Crop Insurance Ratemaking and Profitability Projections Casualty Actuarial Society Seminar on Ratemaking San Antonio Marriott Rivercenter San Antonio,
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Federal Crop Insurance Ratemaking and Profitability Projections
Casualty Actuarial Society Seminar on Ratemaking San Antonio Marriott RivercenterSan Antonio, TexasMarch 27-28, 2003COM-7
Richard Bill, FCAS Country Insurance & Financial Services
* Coefficient of Variation for Original Distribution
Final Considerations• Profitability varies considerably
from state to state• Complex models are available to
help decide which funds each policy should be assigned to
• Underwriting Gain is reduced because expense reimbursement is inadequate to cover actual expenses
Future-Random Thoughts• Revenue policies may become, by far,
the predominate coverage sold
• Should a different procedure be used to weight County loss cost with surrounding Counties (see Christopherson and Werland, “Using a Geographic Information System to Identify Territory Boundaries”, 1996 Winter Forum)
Future (Cont.)• Federal Money is tight and perception is
that companies are making too much money
• Federal Govt. will renegotiate a new Standard Reinsurance Agreement (SRA) next year
• The federal budget includes a provision to reduce industry expense reimbursement by 2 points in spite of the current shortfall
• Will there be an impact on the number of companies participating