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Articles

Featured

Overview of Ledger's Modeling

Ledger's Modeling Philosophy

Ledger Investing does not use actuarial science to price risk. We explain why we don't, and provide an intuitive justification of our alternate method through an analogy to a fund of funds.
#level-beginner #philosophy
Casualty Insurance Industry Overview

Line of Business Development Patterns

When an insurance company issues a policy, the company knows the amount of premium it will receive, but it may not know for many years exactly how much it will cost to settle all of the claims associated with that policy. The study of patterns of claims emergence and loss payments is called loss development. We illustrate a few of the key characteristics of loss development and how it varies by statutory line of business and by company. Finally, we look at the relationship between the length of time it take for losses to develop and the degree of uncertainty surrounding the ultimate value of those losses.
#industry-analysis #level-beginner #featured
Casualty Insurance Industry Overview

Line of Business Loss Ratio Behavior

The core measure of an insurance company's performance is its loss ratio. We describe what loss ratios are, and how they tend to behave. We explore how loss ratios vary by line of business, and what types of variation in behavior are typical. Finally, we explore the root causes behind why different lines of business have different loss ratio behavioral characteristics.
#industry-analysis #level-intermediate #featured

Industry Analysis

Casualty Insurance Industry Overview

Casualty Insurance Lines of Business

Property & casualty insurance includes a wide number of distinct insurance products with widely varying characteristics. We describe what, fundamentally, property & casualty insurance covers. Property & casualty insurance products are grouped into lines of business for statutory reporting purposes. We describe what these lines of business are and why they are difficult to pin down precisely.
#level-beginner #industry-analysis
Casualty Insurance Industry Overview

Property & Casualty Insurance Companies

We look at basic features of insurance companies by exploring statutory filings data. We see how many property & casualty insurance companies there are, and how insurance groups are formed of clusters of insurance companies. We also look at the size distribution of insurance companies, and discuss reinsurance strategies of different insurance companies.
#level-beginner #industry-analysis
Casualty Insurance Industry Overview

Line of Business Volume and Diversification

The US property & casualty industry is subdivided into 22 separate lines of business in Schedule P of the annual statements mandated by the NAIC. We explore the relative size of each of these lines of business and trends in line of business size over time. We also look at the degree of market concentration within each line of business, and the extent to which insurers diversify their activities across multiple lines of business.
#level-beginner #industry-analysis #featured
Casualty Insurance Industry Overview

Line of Business Development Patterns

When an insurance company issues a policy, the company knows the amount of premium it will receive, but it may not know for many years exactly how much it will cost to settle all of the claims associated with that policy. The study of patterns of claims emergence and loss payments is called loss development. We illustrate a few of the key characteristics of loss development and how it varies by statutory line of business and by company. Finally, we look at the relationship between the length of time it take for losses to develop and the degree of uncertainty surrounding the ultimate value of those losses.
#industry-analysis #level-beginner #featured
Casualty Insurance Industry Overview

Line of Business Loss Ratio Behavior

The core measure of an insurance company's performance is its loss ratio. We describe what loss ratios are, and how they tend to behave. We explore how loss ratios vary by line of business, and what types of variation in behavior are typical. Finally, we explore the root causes behind why different lines of business have different loss ratio behavioral characteristics.
#industry-analysis #level-intermediate #featured

Modeling Philosophy

Overview of Ledger's Modeling

Ledger's Modeling Philosophy

Ledger Investing does not use actuarial science to price risk. We explain why we don't, and provide an intuitive justification of our alternate method through an analogy to a fund of funds.
#level-beginner #philosophy
Overview of Ledger's Modeling

Ledger's Loss Forecasting Strategy

Ledger uses a strategy for forecasting casualty insurance loss ratios that is significantly different from traditional actuarial practice. We describe how Ledger's analytics team approaches this problem, how our approach differs from traditional methods, and the justification behind our approach.
#philosophy #level-beginner #featured

Anthologies

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Anthologies

Property and Casualty Insurance Industry Analysis

This anthology is a collection of articles we've written on the property and casualty insurance industry. It covers basics of the property and casualty insurance space, analyses of the competitive landscape, describes differences between lines of business, and explores possible causal explanations for these differences. The anthology includes the following articles published individually: - Property & Casualty Insurance Companies - Property & Casualty Lines of Business - Line of Business Volume and Diversification - Line of Business Development Patterns - Line of Business Loss Ratio Behavior
#anthology