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Senior Consulting Actuary

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Erich A. Brandt

Erich Brandt is a Senior Consulting Actuary with Pinnacle Actuarial Resources, Inc. in the Bloomington, Illinois office, with nineteen years experience as an actuary.

He is a Fellow of the Casualty Actuarial Society and a Member of the American Academy of Actuaries.  He currently serves as a member of the Casualty Actuarial Society (CAS) Examination Committee.

Mr. Brandt has considerable experience in assignments involving loss reserving, funding studies, cost allocation mechanisms, loss cost projections, competitive analysis, captive feasibility studies, personal lines ratemaking and financial analysis of insurance companies.

Mr. Brandt has made numerous presentations to brokers, corporate risk managers, and CFO’s regarding loss reserving, future loss projections and how their company’s characteristics impact their actuarial calculations.  He also works at length with the students and faculty at Illinois State University (ISU) by teaching class sessions on insurance operations, assisting with the compilation of data for academic research, and discussing the actuarial profession with current and prospective actuarial science majors.  Furthermore, Mr. Brandt is a member of the advisory board for the actuarial science major at ISU.

Publications and Media

July 6 2017 APEX Discussion Series
Causes of Recent Reserve Development
Authored by Erich A. Brandt and Gregory W. Fears, Jr..

Your Results May Vary
An Updated Look at RRG Financial Exam Costs
Authored by Erich A. Brandt and Gregory W. Fears, Jr. and Robert J. Walling III.

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Case Studies

Self Insured Loss Reserve Analysis

Self Insured Loss Reserve Analysis

Pinnacle was approached by a major, national manufacturer to perform a loss reserve analysis of their retained workers compensation, auto liability, general liability and products liability loss exposures. The previous actuary worked for a large broker which the customer felt presented a conflict of interest. In addition, the actuary used industry benchmarks that the customer felt did not accurately represent their loss development behavior. Pinnacle worked with the customer to better understand their loss exposures, claims handling practices, and corporate risk management philosophy. We worked with the company to gather better internal data and refine the industry benchmarks to better reflect their third party administrator, industry focus and geographic mix. These refinements, and many others, led to a more accurate analysis of the company’s retained loss exposures, a reduced provision for unpaid claims on their balance sheet, and reduced collateral requirements from their fronting carrier.

U S Domestic Statement of Actuarial Opinion

U S Domestic Statement of Actuarial Opinion

Domestic U.S. property/casualty insurers and risk retention groups are required to file an Annual Statement with state regulators each year by March 1. Part of that filing includes the submission of a formal Statement of Actuarial Opinion (SAO) by a qualified Appointed Actuary as to the reasonableness of held loss and loss adjustment expense reserves. The SAO must be one of five types:

  • Reasonable
  • Inadequate/Deficient
  • Excessive/Redundant
  • Qualified
  • No Opinion

In addition to the SAO, most jurisdictions require an Actuarial Opinion Summary (AOS) providing more detail on the Appointed Actuary’s specific findings by March 15. Lastly, a formal report narrative in support of the SAO and AOS is required to be available by May 1.

As the SAO is a compliance document, the primary audience is state regulators but the individual company must arrange for the service to be provided.

A recent SAO for one of our clients touched on many of the required disclosures:

  1. The adequacy of held reserves on a net basis were below the low end of our range of reasonable reserves until we took into account anticipated salvage and subrogation recoveries.
  2. The unearned premium reserves for long duration contracts were substantial and we conducted a review to determine they were adequate
  3. The Company held material loss and loss adjustment expense reserves for pools and associations. In order avoid having to issue a Qualified Opinion, we separately computed indicated reserves for two of the pools/associations, and obtained an SAO from the Appointed Actuary for the National Workers Compensation Reinsurance Pool.
  4. Reinsurance recoveries were in doubt for certain carriers as balance were sometimes overdue by more than 90 days. After reviewing the reinsurers’ A. M. Best ratings, we made the required disclosures about reinsurance collectability. 

Workers' Compensation

Workers' Compensation

Pinnacle was retained by a major national political organization to investigate the impact of several workers compensation reforms including: implementation of mandatory managed care, privatization of state workers compensation insurance funds and the permitting of private insurers to enter previously monopolistic workers compensation states. Our analysis looked at state-level differences in rate levels, insurer experience, coverage competition, the mix of medical and indemnity claims and numerous other metrics. The study was extremely well received and ultimately presented to more than half of the nation’s governors.

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