What are some concepts that are only in property and not in casualty?
Time between accident date and report date is generally shorter for property.
Property claims mature WAY faster than casualty claims.
Generally higher ALAE associated with casualty claims as well.
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In my experience you can get a lot deeper into trend and mix analysis in property because you don’t have the development uncertainty
Also CATs are a huge topic in property without much parallel in casualty. Large fires and reinsurance for them can be similar.
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There are shock losses on the casualty side that is likely more influenced by the claims handling of the company (rather than some “random” act).
But agree that there are greater uncertainties with property “catastrophe” claims–including how will a company define an event as a castrophe–than with shock events.
It’s not a perfect analogue, but clash (an occurrence triggering multiple lines/coverages) is a thing in casualty.
And I do have certain cat perils factored in to my modeling of workers comp.
Monitoring tort reforms is a must for certain casualty lines.
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Liability lines can and do have claims open years past the policy effective date, and can and do have claims that are still open years past the occurrence date. This makes selection of tail factors much more important and can cause issues with trend selection.
Policy limit distributions look more discrete, and it’s not uncommon to see $1M limits or 1M/2M limits for a lot of policies. CATs are much less of a concern, but large losses are a thing and their interaction with policy limits can screw with development patterns if not watched / if policy limit losses occur early. ALAE / loss will tend to be higher, so it becomes a material consideration in pricing and reserving. Reinsurance cost is significantly lower, to the point that it’s practically a rounding error in pricing.
That’s just off the top of my head. Interesting that you mention this, because I’m about to go from liability to property, so things I didn’t have to worry about I’m now going to have to worry about.
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Just off the top of my noggin:
Insurance to Value
Exposure trend related to real estate market
frequency trend related to weather
severity trend related to weather
global weather patterns affecting losses
building codes affecting losses
forced placed business
potentially higher policy limits
policy exposure splits: building, contents, appurtenant structures, etc
business interruption
lower ALAE generally due to less litigation
supply chain issues affecting claims costs
demand surge
cat modeling
climate change
geographic risk correlations
less accurate size of loss curves
deductibles
fewer years in schedule P
less investment income potential
BCAR ratio & BCAR ratio testing
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You routinely have a lot more details about the risk on the property side. Exactly where it is, how it is built, when it was built, what it’s made of, when it was last repaired (in many ways), … the forms are really long. For a liability risk, you often just have the publicly available information about a company, plus some stuff you’ve asked for (and the insured might have lied.)
And yes, insurance to value rather than to arbitrary numbers. They are quite different, enough so that it’s something of a historical accident they are insured by the same companies.
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Losses by coverage (building, appurtenant structure, personal property, etc.) and peril (fire, wind, theft, etc,) and different limits by coverage seem to get more attention in property than in casualty.
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Awe. Health actuaries left out of the ask again!
Not exactly . . . Workers Comp has a lot more in common with Health than other casualty lines. I think the “biggest” difference with Health is that WC is generally strict liability (only have to prove that the injury/illness occurred while “on the job” oversimplification, but . . . .
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Has health insurance seen year after year of rate decreases over the last 12 years also?
[tangent] the talk here of the similarities of WC and health reminds me of the time a bunch of Life insurers got interested in carve outs where they reinsured the health portion of WC policies. That did not go well, to say the least. Anyone else remember Unicover? There were other carve out pools, but that one was the biggest and most spectacular crash. [/tangent]
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It may have been a reading as a case study around the time I did my IoA general insurance fellowship early 2000s. It was a fairly recent failure and there was fear Lloyds might have similar structures. It was topical then.
I did do a bit of actuarial training in the last few years and it wasn’t in the material.
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