FCAS, MAAA
Senior Consulting Actuary

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Blog posts

Pierogis and Palaces
Jan 9, 2018

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Erich A. Brandt

Erich Brandt is a senior consulting actuary with Pinnacle Actuarial Resources in Bloomington, Illinois. He has more than 20 years of experience as an actuary.

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

Erich has made numerous presentations to brokers, corporate risk managers, and CFOs regarding loss reserving, future loss projections and how company characteristics impact actuarial calculations. He currently serves as a member of the Casualty Actuarial Society (CAS) Syllabus and Examination committee.

Erich also works with students and faculty at Illinois State University (ISU). He engages in joint research and speaks at actuarial club and the Katie School of Insurance & Risk Management functions. He is a member of the advisory boards for the actuarial science major at ISU and the Milwaukee School of Engineering. Erich is also on the board of directors of the Illinois Shakespeare Festival.

Publications and Media

October APEX Webinar
An Update to Pinnacle’s Risk Retention Group Benchmarking Study
Authored by Erich A. Brandt and Gregory W. Fears, Jr..

July APEX Webinar
Causes of Recent Reserve Development
Authored by Erich A. Brandt and Gregory W. Fears, Jr..

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Case Studies

Captive Feasibility Study

Captive Feasibility Study

When a regional physicians group, with a moderate deductible program realized they were not getting due credit for more than a decade of exceptional loss experience, they decided to explore other options.

They chose Pinnacle specifically due to our expertise in captive and self-insurance programs.

Initially, Pinnacle discussed options including segregated cell captives, single parent captives, and even risk retention groups once they began to consider marketing the program to other similar regional physician groups.

While the customer was considering the structural alternatives, Pinnacle pursued a funding analysis. Credibility weighting the customer’s experience with industry benchmark data, produced estimates of expected losses and loss variability in several different loss layers. This not only showed the additional risk associated with higher limits of self-insurance, but was also tremendously valuable in negotiations with fronting carriers and reinsurers.

The client decided to increase the deductible on the coverage provided by their insurer, which offered more responsive pricing due to Pinnacle’s funding analysis and to form an off-shore captive providing deductible buyback coverage.  The comfort level our client had with the insured’s services also influenced the decision.

Pinnacle also worked with the captive manager to develop the feasibility study and pro forma financial statements that become the foundation of the captive application. The application was approved as submitted and the captive is running quite successfully.

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.

Staffing Self Insured Reserve Analysis

Staffing Self Insured Reserve Analysis

Pinnacle was retained by a group of staffing companies with large self-insured retentions for their workers compensation loss exposures to perform quarterly loss reserve analyses and annual funding studies. Pinnacle initially used customized benchmarks for the staffing as the basis for our analyses. However, it became apparent that the benchmarks were not reflective of the unique characteristics of this program. Pinnacle worked with the third party administrator (TPA) for the program to gather additional historical experience for the program, as well as consolidated experience for several similar programs administered by the TPA. Using the results of our analysis of the TPA’s previous experience for this program and others like it, we were able to develop benchmark loss development assumptions that tracked much more closely with the program’s actual loss emergence.

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