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ARIA 2008 Annual Meeting ProgramAmerican Risk and Insurance Association716 Providence Road Malvern, PA 19355-3402Phone (610) 640-1997 Fax (610) 725-1007 E-mail: aria@cpcuiia.orgWeb site: www.aria.orgAmerican Risk and Insurance Association2008 Annual MeetingMarriott Portland Downtown Waterfront HotelAugust 3–6, 2008 Portland, Oregon
Platinum Meeting SponsorsSilver Meeting SponsorsMarsh of SeattleSt. Mary’s UniversityUniversity of Louisiana, LafayetteThe University of MississippiBronze Meeting SponsorsGold Meeting SponsorsSucceedingtogether.EDUCATION RESEARCH ETHICSDrake UniversityFlorida State UniversityIndiana State UniversityMiami University-OhioMississippi State UniversityUniversity of Iowa, Vaughan InstituteVirginia Commonwealth University2008 Supporting OrganizationsAmerican Institute for CPCU/IIABaylor UniversityCompliance 360, Inc.Georgia State UniversityHEC MontrealSt John’s UniversityTemple UniversitySponsors of Academic AwardsCasualty Actuarial SocietyRobert Hedges Undergraduate Scholarship FundLes B. Strickler Education FundRobert C. Witt Award
ARIA Officers and Directors2007–2008 ARIA Board MembersOfficersPresident Mary Weiss, Temple UniversityPresident-Elect Terri Vaughan, Drake UniversityVice President Vickie Bajtelsmit, Colorado State UniversityImmediate Past President James Garven, Baylor UniversityDirectorsDebbie Babcock (2008), Illinois State UniversityGene Lai (2008), Washington State UniversityRichard Derrig (2009), Opal ConsultingAnne Kleffner (2009), University of CalgaryDavid Sommer (2010), St. Mary’s UniversityGeorge Zanjani (2010), Georgia State University2008–2009 Board MembersOfficersPresident Terri Vaughan, Drake UniversityPresident-Elect Vickie Bajtelsmit, Colorado State UniversityVice President Gene Lai, Washington State UniversityImmediate Past President Mary Weiss, Temple UniversityDirectorsRichard Derrig (2009), OPAL ConsultingAnne Kleffner (2009), University of CalgaryDavid Sommer (2010), St. Mary’s UniversityGeorge Zanjani (2010), Georgia State UniversityDavid Appel (2011), Milliman, Inc.Laureen Regan (2011) Temple UniversityExecutive OfficeExecutive Director Anthony J. Biacchi, American Institute for CPCU/IIAAdministrative Assistant Lee Gardner, American Institute for CPCU/IIAMeeting Planner Jackie Lorince, American Institute for CPCU/IIAProgram Designed By: Mary P. Clark, American Institute for CPCU/IIAPrinted By: American Institute for CPCU/IIA1
Meeting SponsorsA special thanks to the generous contributions and commitment of the following sponsors for meals, refreshments,receptions, and services associated with ARIA’s 2008 Annual Meeting.First-Time Attendees ReceptionSt. John’s UniversitySunday Welcome ReceptionCasualty Actuarial SocietyIllinois State University, The Katie SchoolMonday Buffet BreakfastGriffith Insurance Education FoundationISO, Innovative AnalyticsUniversity of Georgia, Terry CollegeMonday AM RefreshmentsWashington State UniversityMonday President’s LuncheonOregon Mutual InsuranceWashington Chapter RIMSPEMCO InsuranceMonday PM RefreshmentsJRI Editors’ BreakfastUniversity of Louisiana at LafayetteMississippi State UniverstiyTuesday AM RefreshmentsIndiana State, Gongaware CenterMiami University of OhioTuesday Awards LuncheonUniversity of Wisconsin at MadisonUniversity of Illinois at Urbana-ChampaignFlorida State UniversityUniversity of IowaTuesday PM RefreshmentsSt. Mary’s UniversityThe University of MississippiTuesday PM Ice Cream BreakDrake UniversityEnumclaw Insurance GroupMarsh of SeattleWednesday Buffet BreakfastPortland Spirit River Boat CruiseAnnual Meeting Program BookletTuesday Buffet BreakfastWine Glass Party ClipsTemple UniversityLaval UniversityUniversity of CalgaryBaylor UniversityGeorgia State UniversityAmerican Institute for CPCU/IIAAmerican Institute for CPCU/IIA2009 ARIA Annual Meeting LocationRenaissance Providence Hotel Providence, RIAugust 2–5, 20092
Marriott Downtown Waterfront Meeting Rooms Floor PlanHotel Business Center Hours:Open 24/7Attended 8:00 AM–5:00 PM, Monday to FridayJeff Anderson, (503) 499-6329Meal Locations:Buffet Breakfasts Salon FJRI Editors’ Breakfast Medford RoomLuncheons Salon FPrivate Meeting Room:Salem Room Reserve time at registration deskMeeting RoomsBallroom Level Floor PlanPortland Spirit River Boat Cruise: Boarding: 6:30 PM with ticketCruise: 7:00 PM–9:30 PM Location: Tom McCall Waterfront Park, where Salmon Street meets NaitoParkway/Front AvenueID: Photo ID required, no exceptions Route: Public cruises aboard Portland Spirit typically run South (upstream)from downtown Portland to the Milwaukie Basin/Lake Oswego area.Cell Phone Reminder:Please turn off all cell phones during a presentation. Thank you.Going Green: Spring water will be available at water stations. Water bottles will not beprovided.Name Badge:Please wear your badge for admittance to all meeting and social functions.3
ARIA Annual Meeting Program At a GlancePortland, OR August 3–6, 2008Sunday, August 38:00 AM–3:30PM5:00 PM–5:30 PM5:30 PM–7:00 PMARIA Board of Directors Meeting Portland RoomFirst Time Participants Reception Mt. Hood RoomWelcome Reception Mt. Hood RoomMonday, August 47:15 AM–8:15 AM8:30 AM–10:00 AM10:00 AM–10:15 AM10:15 AM–11:45 AM12:00 PM–1:30 PM1:45 PM–3:15 PM3:15 PM–3:30 PM3:30 PM–5:00 PM6:30 PM–9:30PMBreakfast Salon FPlenary Session I Salon EIndustry and Academic Collaboration: Opportunities and ChallengesCoffee Break Ballroom FoyerConcurrent Sessions IConcurrent Session I A: Directors and Officers Insurance Salon EConcurrent Session I B: Corporate Governance Salons G-HConcurrent Session I C: Insurance Finance Salon AConcurrent Session I D: Catastropic Risk Salons B-CConcurrent Session I E: Insurer Capital Salon DPresident’s Seminar and Luncheon Salon FKeynote Speaker: Dwight Jaffee, Haas School of Business, University of California, BerkeleyPlenary Session II Salon ECAS Session: Florida Homeowners Insurance–How Big is the Availability Problem? IsThere a Fair Solution?Moderator: Jeffrey L. Kucera, FCAS, MAAA, Sr. Consultant, EMB America LLCCoffee Break Ballroom FoyerConcurrent Sessions IIConcurrent Session II A: Solvency Salon EConcurrent Session II B: Consumer Issues Salons G-HConcurrent Session II C: Ratings Salon AConcurrent Session II D: Catastrophe Risk Salons B-CConcurrent Session II E: Economies of Scale and Scope Salon DPortland Spirit River Boat Cruise and 75th Birthday CelebrationTuesday, August 57:15 AM–8:15 AM7:15 AM–8:15 AM8:30 AM–10:00 AM4Breakfast Salon FJRI Editors Breakfast Medford RoomPlenary Session III Salon EHealth Insurance ReformModerator: TBA
Tuesday, August 5, continued10:00 AM–10:15 AM10:15 AM–11:45 AM12:00 PM–1:30 PM1:45 PM–3:15 PM3:15 PM–3:30 PM3:30 PM–5:00 PM5:15 PM–6:15 PMCoffee Break Ballroom FoyerConcurrent Sessions IIIConcurrent Session III A: Life Insurance and Annuities Salon EConcurrent Session III B: Efficiency and Performance Salons G-HConcurrent Session III C: Risk Management Salon AConcurrent Session III D: Law and Economics Salons B-CConcurrent Session III E: Reinsurance Salon DARIA Awards Luncheon Salon FConcurrent Sessions IVConcurrent Session IV A: Annuities Salon EConcurrent Session IV B: Insurance Economics Salons G-HConcurrent Session IV C: Price Regulation Salon AConcurrent Session IV D: Efficiency and Performance Salons B-CConcurrent Session IV E: Retirement Salon DCoffee Break Ballroom FoyerConcurrent Sessions VConcurrent Session V A: Insurance Cycles Salon EConcurrent Session V B: Organizational Form Salons G-HConcurrent Session V C: Corporate Governance Salon AConcurrent Session V D: Diversification Salons B-CConcurrent Session V E: Insurance Finance Salon DGeneral Business Meeting Salon EWednesday, August 67:15 AM–8:15 AM8:30 AM–9:15 AM9:30 AM–10:15 AM10:15 AM–10:30 AM10:30 AM–12:00 PM12:10 PM–1:00 PMBreakfast Salon FSemi-Plenary Session IV Salon ELes B. Strickler Innovation in Instruction Award PresentationSemi-Plenary Session V Salon EExpert Testimony in Insurance: A TutorialCoffee Break Ballroom FoyerConcurrent Sessions VIConcurrent Session VI A: Modeling Salon EConcurrent Session VI B: Adverse Selection Salons G-HConcurrent Session VI C: Corporate Finance Issues Salon B-CARIA Board of Directors Meeting Portland Room5
ARIA Annual Meeting Program SchedulePortland, OR August 3–6, 2008Sunday, August 38:00 AM–3:30PM5:00 PM–5:30 PM5:30 PM–7:00 PMARIA Board of Directors Meeting Portland RoomFirst Time Participants Reception Mt. Hood RoomWelcome Reception Mt. Hood RoomMonday, August 4 INDUSTRY DAY7:15 AM–8:15 AM8:30 AM–10:00 AM10:00 AM–10:15 AM10:15 AM–11:45 AM6Breakfast Salon FPlenary Session I Salon EIndustry and Academic Collaboration: Opportunities and ChallengesModerator: James Britt, CPCU, President CPCU Society and Managing Director MarshPanelists: Susan Cohen Slavet, CPCU, Program Manager HR Development Liberty MutualFaith Neale, Assistant Professor of Risk and Insurance University of North Carolina at CharlotteSandy Masters, CPCU, President Society of Insurance Trainers and Educators and WestRegion Marketing Manager AICPCU/IIAMarvin Kelly, CPCU, President-Elect CPCU Society and CEO Texas Property and CasualtyInsurance Guarantee AssociationCoffee Break Ballroom FoyerConcurrent Sessions IConcurrent Session I A: Directors and Officers Insurance Salon EModerator: Lawrence Powell, University of Arkansas at Little Rock1. Directors’ & Officers’; Liability Insurance, Corporate Risk, and Risk TakingPresenters: Sharon Tennyson, Cornell UniversityMartin Boyer, HEC MontrealDiscussant: Ryan Lee, University of Calgary2. Directors’& Officers’ Insurance and Corporate GovernancePresenters: T. Joyce Chen, National Chengchi UniversityShu-Hsing Li, National Taiwan UniversityDiscussant: Joseph Ruhland, Georgia Southern University3. D&O Insurance and Corporate GovernancePresenters: Li-Ming Han, Chinese University of Hong KongRichard MacMinn, Illinois State UniversityDiscussant: Faith Neale, University of North Carolina at CharlotteConcurrent Session I B: Corporate Governance Salons G-HModerator: Cassandra Cole, Florida State University1. Executive Compensation and Reserve Errors in the Property andCasualty Insurance IndustryPresenters: Mark Browne, University of Wisconsin-MadisonYu-Luen Ma, Illinois State UniversityPing Wang, St. John’s UniversityDiscussant: Gene Lai, Washington State University
Monday, August 4, continuedThe Impact of CEO Turnover on Property-Liability Insurer PerformancePresenters: Enya He, University of North TexasDavid Sommer, St. Mary’s UniversityXiaoying Xie, California State University at FullertonDiscussant: Yi-Hsun Lai, National Chi Nan University3. Equity-based Compensation, Corporate Governance and Loss Reserve Managementof Property Liability InsurersPresenter: Wen-Chang Lin, National Chung Cheng University, TaiwanDiscussant: Michael McNamara, Washington State UniversityConcurrent Session I C: Insurance Finance Salon AModerator: Rachel Huang, Yuan Ze University, Taiwan1. The Cost of Equity for Canadian Property-Liability InsurersPresenters: Mary Kelly, Wilfrid Laurier UniversityNorma Nielson, University of CalgaryDiscussant: Richard Phillips, Georgia State University2. Investment Cycles in the Property Casualty Insurance MarketPresenters: Yayuan Ren, Illinois State UniversityQixiang Sun, Peking UniversityZhengzheng Sun, University of Rhode IslandTong Yu, University of Rhode IslandDiscussant: William Ferguson, University of Louisiana at Lafayette3. Property/Liability Insurer Performance AssessmentPresenters: Kevin Gatzlaff, Florida State UniversityJames Carson, Florida State UniversityDiscussant: Andre Liebenberg, The University of MississippiConcurrent Session I D: Catastrophic Risk Salons B-CModerator: Kathleen McCullough, Florida State University1. Catastrophe Risk and the Regulation of Property InsurancePresenter: Robert Klein, Georgia State UniversityDiscussant: Randy Dumm, Florida State University2. Risk Pricing and Natural CatastrophePresenter: Kim Staking, Colorado State UniversityDiscussant: James I. Hilliard, University of GeorgiaConcurrent Session I E: Insurer Capital Salon DModerator: Patricia Born, Florida State University1. Capital Structure in the Property-Liability Insurance Industry: Tests of the Tradeoffand Pecking Order TheoryPresenters: Jiang Cheng, Temple University and Shanghai Jiao Tong UniversityMary Weiss, Temple UniversityDiscussant: Jeffrey Zhang, University of Rhode Island2.7
Monday, August 4, continuedRebalancing Target Capital in the Financial Sector: The Case of Life InsurancePresenters: Etti Baranoff, Virginia Commonwealth UniversityThomas Sager, University of Texas at AustinThomas Shively, University of Texas at AustinDiscussant: S. Hun Seog, Korea Advanced Institute of Science and Technology3. Mortgage Backed Securities and Capital of Life Insurers: Was the IndustryPrepared for the Credit Crunch of 2007-2008?Presenters: Etti Baranoff, Virginia Commonwealth UniversityThomas Sager, University of Texas at AustinDiscussant: Andres Garcia, National University of RosarioPresident’s Seminar and Luncheon Salon FKeynote Speaker: Dwight Jaffee, Haas School of Business, University of California, BerkeleyTopic: Monoline and Multiline Insurers: Issues Raised by the Subprime CrisisPlenary Session II Salon ECAS Session: Florida Homeowners Insurance–How Big is the Availability Problem? IsThere a Fair Solution?Moderator: Jeffrey L. Kucera, FCAS, MAAA, Sr. Consultant, EMB America LLCPanelists: Chris Carlson, FCAS, MAAA, Consulting Actuary, Pinnacle Actuarial Resources, Inc.W. Lockwood Burke, President, Royal Palm Insurance Co.James Massie, Tallahassee RAACoffee Break Ballroom FoyerConcurrent Sessions IIConcurrent Session II A: Solvency Salon EModerator: Bill Rabel, University of Alabama1. Determinants of Financial Strength Ratings: Evidence from the Lloyd’s MarketPresenters: Yung-Min Shiu, National Cheng Kung UniversityChia-Chien Chiang, Tunghai University, TaiwanDiscussant: Carole Bernard, University of Waterloo2. Detecting Fuzzy Predictor Variables: The Case of Insurer Solvency Surveillancein GermanyPresenters: Thomas Berry-Stölzle, University of GeorgiaMarie Claire Koissi, Western Illinois UniversityArnold Shapiro, Penn State UniversityDiscussant: Hal Pederson, University of Manitoba3. Minimum Standards for Investment Performance: A New Perspective on Non-LifeInsurer SolvencyPresenters: Nadine Gatzert, University of St. Gallen, SwitzerlandMartin Eling, University of St. Gallen, SwitzerlandHato Schmeiser, University of St. Gallen, SwitzerlandDiscussant: Hua Chen, Temple University2.12:00 PM–1:30 PM1:45 PM–3:15 PM3:15 PM–3:30 PM3:30 PM–5:00 PM8
Monday, August 4, continuedConcurrent Session II B: Consumer Issues Salons G-HModerator: Norma Nielson, University of Calgary1. The Effect of Organizational Form and Market Concentration on AutomobileInsurance Claims SettlementPresenters: Mark Browne, University of Wisconsin-MadisonCuncun Luan, University of Wisconsin-MadisonDiscussant: Martin Grace, University of Georgia2. An Economic Analysis of Primary State Chartering—The Case of Risk Retention GroupsPresenter: Tyler Leverty, University of IowaDiscussant: Joan Schmit, University of Wisconsin-Madison3. An Empirical Investigation of State Insurance Department Resources andConsumer ComplaintsPresenter: Laureen Regan, Temple UniversityDiscussant: Chuck Nyce, American Institute for CPCU/IIAConcurrent Session II C: Ratings Salon AModerator: Enya He, University of North Texas1. Comparing Market and Regulatory Assessments of Insurer Performance:Who Knows What When?Presenters: Steven Pottier, University of GeorgiaLeon Chen, University of GeorgiaDiscussant: Kili Wang, Tam Kang University, Taiwan2. Competition Among Rating Agencies and Information DisclosurePresenters: Richard Phillips, Georgia State UniversityNeil Doherty, University of PennsylvaniaAnastasia Kartasheva, University of PennsylvaniaDiscussant: Martin Halek, University of Wisconsin-Madison3. Modeling the Effects of Macroeconomic and Market Factors on Property LiabilityInsurer Rating TransitionsPresenters: Yuling Wang, Florida State UniversityJames Carson, Florida State UniversityDiscussant: David Eckles, University of GeorgiaConcurrent Session II D: Catastrophe Risk Salons B-CModerator: Mary Kelly, Wilfred Laurier University1. Recent Changes to the Structure of the California Earthquake Authority andImplications For the Private MarketPresenter: David Russell, California State University, NorthridgeDiscussant: Robert Klein, Georgia State University2. Optimal Post-Cat Loss Securities Selection in Insurance Companies UnderwritingCat ExposuresPresenter: Stanley Mutenga, Cass Business School, City University, LondonDiscussant: Michael Powers, Temple University9
Monday, August 4, continuedWhy Some Disaster Insurance Does Not ExistPresenters: Yueyun Chen, University of the WestIskandar Hamwi, University of Southern MississippiDiscussant: Jennifer Wang, National Chengchi University, TaiwanConcurrent Session II E: Economies of Scale and Scope Salon DModerator: Debbie Babcock, Illinois State University1. On the Risk Situation of Financial Conglomerates: Does Diversification Matter?Presenters: Nadine Gatzert, University of St. Gallen, SwitzerlandHato Schmeiser, University of St. Gallen, SwitzerlandDiscussant: Yi Ling Chen, National Chengchi University2. Product Diversification and Performance in the Financial Industry: FHC’sExpansion into Insurance ActivitiesPresenters: Mu-Sheng Chang, Temple University and Shippensburg UniversityElyas Elyasiani, Temple UniversityDiscussant: Xiaoying Xie, California State University at Fullerton3. Market Power in the Health Insurance Industry: Evidence from Merger ActivitiesPresenters: James I. Hilliard, University of GeorgiaChinmoy Ghosh, University of ConnecticutRexford Santerre, University of ConnecticutDiscussant: Michael Luhnen, University of St. Gallen, SwitzerlandPortland River Boat Cruise and 75th Birthday Celebration3.6:30 PM–9:30 PMTuesday, August 57:15 AM–8:15 AM7:15 AM–8:15 AM8:30 AM–10:00 AM10:00 AM–10:15 AM10:15 AM–11:45 AM10Breakfast Salon FJRI Editors Breakfast Medford RoomPlenary Session III Salon EHealth Insurance ReformModerator: Patty Born, Florida State UniversityPanelists: Mike Kreidler, Insurance Commissioner, WashingtonCarla Willis, American Medical AssociationCoffee Break Ballroom FoyerConcurrent Sessions IIIConcurrent Session III A: Life Insurance and Annuities Salon EModerator: Sharon Tennyson, Cornell University1. Tax Incentives for Annuitization–Direct and Indirect EffectsPresenters: Alexander Kling, Institut fur Finanz-und Aktuarwissenschaften, GermanyAndreas Richter, Ludwig Maximilian University of MunichJochen Russ, Institut fur Finanz-und Aktuarwissenschaften, GermanyDiscussant: Petra Schumacher, Ludwig Maximilian University of Munich
Tuesday, August 5, continuedA Framing Explanation for the Under Annuitization ProblemPresenters: Jeffrey Brown, University of Illinois at Urbana-ChampaignJeffrey Kling, Brookings InstitutionSendhil Mullainathan, Harvard UniversityMarian Wroebel, Harvard UniversityDiscussant: Jacqueline Volkman, Fordham University3. The Demand for Life Insurance Policy LoansPresenters: Andre Liebenberg, The University of MississippiJames Carson, Florida State UniversityRobert Hoyt, University of GeorgiaDiscussant: Youngkyun Park, Temple UniversityConcurrent Session III B: Efficiency and Performance Salons G-HModerator: Lucinda Trigo-Gamarra, University of Rostock1. The Evaluation of Economic Efficiency under the Consideration of Quasi-FixedInputs: The Case in Taiwan’s Life Insurance IndustryPresenter: James Hao, Tamkang University, Taiwan2. Frontier Efficiency Methodologies to Measure Performance in the InsuranceIndustry: Overview and New Empirical EvidencePresenters: Mart
Griffith Insurance Education Foundation ISO, Innovative Analytics University of Georgia, Terry College Monday AM Refreshments Washington State University Monday President’s Luncheon Oregon Mutual Insurance Washington Chapter RIMS PEMCO Insurance Monday PM Refreshments Enumclaw Insurance
