Pinnacle has several consultants who have appeared as expert witnesses at arbitrations. We are also trained to serve as insurance and reinsurance arbitrators.

A key aspect of a proper reinsurance program is the management of risk. However, when it comes to controlling your property catastrophe exposure, reinsurance may not be sufficient. Pinnacle can assist you in developing a strategy to mitigate your catastrophe exposure. This may include determining the impact of policy changes, including deductibles, or reviewing geographic areas where exposures are driving your reinsurance purchases. We can develop a strategy to mitigate your catastrophe exposure.

Pinnacle provides unique qualifications to assist in collateral negotiations. Loss reserve analyses prepared by Pinnacle may be used as a negotiating tool as it relates to the collateral associated with deductible and/or retentions maintained. Our approach is designed to maximize the usefulness of a program’s actual data. Our extensive expertise with alternative markets, self-insured programs and reinsurance provides us with valuable perspectives on the multitude of factors that can impact collateral negotiations.

Management often desires to be conservative when setting an accrual for unpaid claims liabilities. Routinely we employ a variety of methods to derive indicated accruals for unpaid claims liabilities at a variety of higher confidence levels to help you assess the potential variability in future loss outcomes. Using evaluation methods to reflect process risk, parameter risk and/or model risk, we can help you find out what you need to know about indicated reserves at specified higher levels of statistical confidence.

Pinnacle represents the interests of both buyers and sellers of blocks of business. At other times, our independent analysis is used as a reference point between competing valuations of the unpaid claims obligations. Regardless of the viewpoint, our analysis will reflect an independent evaluation of a program’s indicated unpaid claims liabilities often reflecting provisions for the time value of money (i.e., discounting) and uncertainty (risk margins).

Setting a reasonable accrual for unpaid loss and loss adjustment expense obligations is one of the most critical functions of management in preparation of a program’s financials. Performing such analyses is our bread and butter, but emphasis is always placed on using the program’s actual data to the maximum extent possible (rather than relying on external benchmarks) in order to reflect your program’s unique loss characteristics.

When necessary, we will rely on our library of industry, state and insurer/TPA specific benchmarks. These benchmarks allow us to derive reasonable estimates of the accrual for unpaid claims liabilities to the extent your program’s data is not of sufficient volume or reliability to be fully credible for analysis.

You expect your consulting actuary to interact daily with captive managers, auditors, fronting carriers, reinsurers and other service providers, presenting the analysis of the program’s liabilities for unpaid claims – generally the largest item on the Liability side of the balance sheet. Pinnacle leverages its good working relationships with dozens and dozens of service providers, regulators and managers in jurisdictions around the globe to your advantage.

Loss reserve projections generally take one of four forms:

• Point estimate of mean expected loss and loss expense reserves (i.e., “actuarial central estimate" or best estimate)
• Reasonable range of indicated loss and loss expense reserves
• Reserves at a specified higher level of statistical confidence
• Stochastic forecast of the range of all possible outcomes (i.e., a distribution of potential loss and loss expense reserve estimates)

Developing net loss reserves often requires an estimate of ceded loss reserves and distinct knowledge and skills. Pinnacle has the special skills and knowledge to understand the unique nature of various reinsurance treaty types and their potential impact on loss reserve estimates.

Lack of data and significant uncertainty are characteristics of latent mass tort reserving. Pinnacle has significant experience in this arena – including both ground-up analyses and benchmark approaches. Pinnacle’s expertise can help you understand the issues surrounding latent mass torts and project loss reserves for these difficult and uncertain exposures.

Reinsurance loss reserving requires special skills and knowledge. The reinsurance reserving actuary must understand the unique nature of various reinsurance treaty types and their potential impact on reserve estimates. Pinnacle’s consultants understand reinsurance contract language and have the skill set required to properly evaluate reinsurance loss reserves.

Analysis of a program’s ceded reinsurance reserves can take several forms. A typical loss reserve analysis may first estimate indicated loss and loss adjustment expense reserves on a direct and assumed basis, then separately reviews indicated ceded reserves to determine indicated net reserves by subtraction. Other times, the analysis begins with net data and adds the indicated ceded reserves to develop estimates of amounts on a direct and assumed basis. The reinsurance program may combine elements of quota share, surplus share, excess of loss, aggregate excess, clash and catastrophe coverages.

Commutation pricing often requires an actuarial review of the net present value of the outstanding losses to the treaty. Pinnacle provides extensive experience in reinsurance reserving and treaty analysis needed for commutations pricing. Pinnacle can estimate the value of the commutation and help negotiate the commutation pricing.

Pinnacle’s consultants can help you realize your strategic objectives by helping you optimize your reinsurance program. We can provide an independent review of your reinsurance strategies to help you determine if you are meeting your reinsurance objectives -- whether those objectives are surplus relief or cost effectively managing underwriting variability.

Pinnacle’s experience and exposure-based pricing models evaluate all property and casualty lines. Our pricing models provide independent cost evaluations of both ceded and assumed reinsurance programs. We also provide additional pricing support during renewal season.

Our experience goes beyond typical actuarial functions to risk and product management and underwriting. Pinnacle is uniquely qualified to assist in reinsurance underwriting audits. Many of our consultants have experience as underwriters, risk managers and product managers. In addition, our actuaries have extensive experience using and interpreting the results of vendor catastrophe models. We can help you understand and validate the underlying exposure data used by the catastrophe models ensuring accurate results.

The reinsurance underwriting submission is one of the primary means of communicating to reinsurers the unique qualities of your company. Pinnacle’s consultants are more than actuaries. Our experience as reinsurance underwriters and product managers will provide valuable insight on best representing your firm to potential reinsurance partners.