2012 Conference: Connecting Theory With Practice " 22 nd Annual - PowerPoint PPT Presentation

2012 Conference: “ Connecting Theory With Practice " 22 nd Annual CAA Conference Sheraton, Nassau, Bahamas November 14 - 16, 2012

An Analysis of Historic Motor Loss Ratios in the Caribbean KR Services Limited Kyle Rudden FIA, FSA, ACAS, ACIB, FCCA, CA(T&T) Shogun Seupersad MSc November 16, 2012

Disclaimer This presentation is being made by Kyle Rudden of KR Services Limited (“the • presenter”) . This presentation does not constitute professional advice or create a contractual relationship between Participant and the presenter or any of the organizations with which he may be affiliated. • Neither the presenter nor KR Services make any representation or warranty concerning ideas, judgments, opinions, projections, analyses or estimates which the presenter provides to Participant. • Any decision Participant may make to rely on such ideas, judgments, opinions, projections, analyses or estimates provided as part of this presentation shall be at Participant’s own risk and Participant shall, in its sole discretion, decide to accept or reject or modify any ideas, judgments, opinions, projections, analyses or estimates provided, and all decisions made or actions taken or not taken shall be the sole responsibility of the Participant who shall make an independent analysis thereof with Participant's own professional advisers. • Neither the presenter nor KR Services, assumes any liability whatsoever, whether explicit or implied, with respect to any part of this Presentation or with respect to any oral statement, including but not limited, to any facts, circumstances, assumptions, judgments, opinions, projections, analyses or estimates as may be contained in this Presentation. Where any information and statistics are quoted from any external source, such information or statistics should not be interpreted as having been adopted or endorsed by the presenter or KR Services as being comprehensive or accurate. 3 3

Acknowledgements  We would like to thank all the anonymous data donors who made this presentation possible 4

Purpose  To highlight some features of Caribbean motor insurance loss patterns. 5

Caribbean Motor Insurance  High retention levels  Little or no proportional RI.  Relatively high attachment XOL or CAT cover.  Trinidad & Jamaica NPE/GPE 90-95%  Small claim volumes / data issues limit analysis  e.g. PD vs BI, Commercial vs Personal  Premiums usually driven by market forces.  No pre-approval or filing of rates.  Typically legal requirement 6

Ult Loss Ratios by Territory 2002-2011 80% 70% Loss Ratio 60% 50% T&T Jam 40% Bar Other 30% 2002 2004 2006 2008 2010 Accident Year 7

Progression of Loss Ratio – Jamaica 90% 2002 80% 2003 70% 2004 Loss Ratio 60% 2005 50% 2006 40% 2007 30% 2008 20% 2009 10% 2010 0% 2011 0 2 4 6 8 10 Development Year 8

Progression of Loss Ratio – Trinidad 90% 2002 80% 2003 70% 2004 Loss Ratio 60% 2005 50% 2006 40% 2007 30% 2008 20% 2009 2010 10% 2011 0% 0 2 4 6 8 10 Development Year 9

Trinidad Motor LR Variation - Industry 7 Number of Companies 2009 - 58% 6 2010 - 53% 5 2011 - 52% 4 3 2 1 0 < 30 30-39 40-49 50-59 60-69 >70 Loss Ratio (%) 10

Questions 11

An Analysis of Historic Motor Loss Ratios in the Caribbean KR Services Limited Kyle Rudden FIA, FSA, ACAS, ACIB, FCCA, CA(T&T) Shogun Seupersad MSc November 16, 2012