Pinnacle Newsletter st Quarter by jolinmilioncherie


									2011 Q1

From the
                                                  Pinnacle News     Bloomington Office 309 • 807 • 2300 Fax 309 • 807 • 2301

                                                  Godbold, Malpere & Co. Joins Forces with Pinnacle
Managing Principal                                Terry Godbold and the employees of Godbold, Malpere & Co. (GM&Co.) of Roswell, Georgia
                                                  joined Pinnacle Actuarial Resources, Inc., effective January 1, 2011.
                                                  Terry Godbold’s actuarial consulting business has focused on statutory loss reserve opinions for
                                                  domestic property/casualty insurance companies, captive insurance companies and self-insured
                                                  entities. Located in the greater Atlanta area, Mr. Godbold’s actuarial career spans over 35 years
                                                  and is accompanied by many prestigious leadership roles within the actuarial industry.
                                                  “This provides Pinnacle with a strong presence in the southeastern United States, which is a very
                                                  important target-rich market for our services,” stated Joseph A. Herbers, Managing Principal of
                                                  Pinnacle. “Terry’s experience and long established client base fits in well with Pinnacle’s strategic
                                                  plan,” said Herbers.
                        Joe Herbers
                                                  Godbold’s practice
Outlook for 2011                                  includes statutory financial
                                                  examination work with a               Godbold, Malpere & Co.
The new year holds promise for exciting           number of states, appointed
developments not only for the insurance           actuarial services for                              Join Pinnacle

industry but for Pinnacle in particular. We       companies involved in non-
will place significant emphasis on ERM/           standard auto insurance and                                     ...allows continued success
Solvency II, Predictive Modeling and Data                                                                         utilizing Pinnacle’s expertise and

                                                  with lawyers professional                                       established global resources...
Management practice areas in 2011.                liability markets. GM&Co.
                                                  is very active with public                                                        Terry Godbold
The regulatory environment for solvency
                                                  entity clients and is engaged                                                     Mary Jo Godbold
monitoring will evolve in 2011 as the
NAIC and other regulators interested in           in audit support services
the insurance industry concentrate on             with several audit firms.
economic capital modeling and other               “Joining an established firm that is both well-known and well-respected allows continued success
enterprise risk management approaches             utilizing Pinnacle’s expertise and established global resources to support our efforts in providing
for assessing future capital and surplus needs.   outstanding professional services to our clients,” said Terry Godbold.
The impact of Solvency II currently being
implemented in the European Union will            Terry, and his wife Mary Jo Godbold, are both Associate members of the Casualty Actuarial
come to Bermuda in 2011 and to the United         Society and of the American Academy of Actuaries. Both bring 25 years of consulting experience
States shortly thereafter.                        each to Pinnacle. Mr. Godbold is a Fellow in the Conference of Consulting Actuaries. Both Terry
                                                  and Mary Jo have similar career paths, beginning with the Hartford Insurance Group (Hartford,
Data management is an emerging area of            CT) in the early 70s, moving to Great American
practice as the granularity and sheer volume      Insurance Company (Cincinnati, OH) later that
of data we commonly review grows every                                                                        ....Terry’s experience and long
                                                  decade. Terry joined Capital Enterprise Insurance           established client base fits in well
year. Increased demands are placed on our         Company in the early 80s, and along with Mary               with Pinnacle’s strategic plan...
consultants and analysts to develop new           Jo joined the consulting ranks with Ernst & Young
and innovative solutions to business              (Louisville, KY) in the mid 80s. Forming GM&Co.                   Joseph A. Herbers, Managing Principal
problems of the day.                              in 1994, this team has been based and practicing
Predictive modeling applications have             in the Atlanta area since. Terry remains an active and steadfast alum of Florida State University.
been reserved for personal lines and small        Pinnacle welcomes the expertise brought by Terry, Mary Jo and our new Atlanta employees.
commercial lines underwriting and tiering
type projects in the past. However, we will
devote much of 2011 to extending such             Federal Oversight of Insurance Business                                   LeRoy Boison, FCAS, MAAA
applications to the claims area, working with
third party administrators and companies          The recent Dodd-Frank legislation overhauling        Additionally, the legislation creates the “first
alike to unlock crucial information and           the regulation of the financial services industry    ever” Federal Insurance Office (FIO) under
relationships in the data to help them manage     in the United States will have an impact on the      the auspices of the U.S. Treasury Department.
claims smarter and more economically.             business of insurance.                               One stated goal of FIO will be to gather
The coming new year portends exciting new         The legislation creates the Financial Stability      information regarding the insurance industry
developments indeed!                              Oversight Council (FSOC), which has the              in order to determine the effectiveness of state
                                                  authority to subject non-bank financial              regulation as it relates to identifying gaps in
                                                  companies like insurers to oversight if they         insurance regulations that could contribute to
              Joseph A. Herbers, ACAS, MAAA
                                                  pose a potential threat to the financial stability   a systemic crisis in the industry or in the
                                                               domestic financial system.
                                                  of the U.S.
                                                                                                                                    continued on page 3
 Social Media and
                                                                                Pinnacle Webinars

 Professional Services Firms                                                                                                                                                              Apex Discussion Series
                                                                                    Jan           Internet Auto Insurance Purchasing Behavior
 Social media is being used by businesses large and small to quickly                Feb           ERM Fundamentals and Implementation
 create a larger presence in their industry. With every opportunity                 March         Vehicle Rating using Predictive Modeling Techniques
 there is risk, and the digital world can be fraught with danger; viruses,          April         Audit
 susceptibility to hackers, content control and consumer expectations               May           Commercial Lines Credit Scoring
 are just a few examples. Perhaps the biggest danger for small business,            June          Healthcare
 though, is reputational risk.                                                      July          Claim Fraud
 The most pertinent question for a firm our size is not whether or not we           Pinnacle webinars are generally offered on the 3rd Thursday of the
 should become involved in social media, but how and when?                          month from 2 to 3 p.m. E.S.T. Be sure to secure your registration online!
 Actuaries must abide by high levels of professionalism. The Actuarial
 Standards Board (ASB) promulgates Standards of Practice that govern
                                                                                Pinnacle Calendar

 the manner in which we perform our work and communicate the
 results. The American Academy of Actuaries (AAA) promulgates the                   March 2 - 4          NAMIC Commercial Lines Underwriting Seminar
 Code of Conduct and Qualification Standards that we must observe as                March 14 - 16        CAS Enterprise Risk Management Symposium
 well. In fact, the AAA defines a Statement of Actuarial Opinion (SAO)              March 13 - 15        CICA International Conference
 as a formal statement of the actuary’s professional opinion on a                   March 20 - 22        CAS Ratemaking & Product Management
                                                                                    March 30 - April 2   HB Litigation Insurance Insolvency & Reinsurance
 defined subject. Such statements can and do include blogs, threads,
                                                                                    April 3 - 6          PLRB/LIRB Claims Conference
 and even e-mails.                                                                  April 4 - 7          SAS Conference
 The ASB’s requirements for documentation, disclosure, and                          April 10 - 12        Auto Insurance Report Conference
 communication of findings are such that failure to comply can lead to              April 20 - 22        NAMIC Personal Lines Underwriting Seminar
 counseling and/or discipline by credentialing bodies of the profession.            May 1 - 5            RIMS Annual Conference
 Furthermore, statements made in social media outlets could endanger                May 4 - 6            ARIAS Spring Conference
                                                                                    May 15 -18           CAS Spring Meeting
 the reputation of the actuary’s employer. It is therefore imperative for           May 25 -26           USA Risk Conference
 actuaries to respect these guidelines, especially when considering the             June 5 - 8           IASA Annual Education Conference
 viral and enduring characteristics of social media.                                June 5 - 8           Bermuda Captive Conference
                                                                                    June 6 - 7           CAS Reinsurance Seminar
                                                                                    June 15 -17          ACE America’s Claims Event
                                                                                    August 9 - 11        VCIA Annual Conference
                                                                                    For additional information on how your company can benefit
                                                                                    from Pinnacle's involvement in these events , please visit our website.

                                                                             Given that social media takes so many forms (e.g., blogs, LinkedIn,
                                                                             Facebook and Wikipedia - just to name a few), the approach to each
                                                                             outlet must be conducted in a systematic, professional manner. Clearly,
                                                                             all communication qualifying as a statement of actuarial opinion must
                                                                             meet documentation and disclosure requirements. However, doing so
                                                                             might make the communication appear overly qualified and thereby
 Questions pertinent to becoming involved in social media include:           dilute the inherent message or timeliness thereof.
   • How does the actuary balance opportunity and                            Dedicated resources are necessary not only to keep the social media
     professionalism with the employer?                                      presence active every day, but also to have adequate peer review before
   • How should the timeliness of a message be balanced                      such is sent out into the electronic world. The unique risks faced by a
     with the need for peer review?                                          professional services firm such as Pinnacle are profound, yet the manner
   • Is this social media outlet the proper forum to                         in which we communicate is evolving quickly.
     demonstrate thought leadership?
   • Should social media be used to promote individuals                      As we develop and refine our approach to social media we begin with
     or the firm as a whole?                                                 our mantra: “Look before you leap.” Δ

                                                                             Δ Robert J. Walling, III and Peter S. Rauner showcase expertise in
      Pinnacle Expertise

                                                                             Q3 Monograph publications:
      and Thought                                                              ° improving commercial casualty claims Handling witH
                                                                                 predictive analytics
                                                                               ° does your 831(b) captive Quack (respectfully.)
                                                                                                                                                                        Monograph                                                                                                                            Monograph
  Δ In September, ‘10 at the Casualty Loss Reserve Seminar (CLRS),                                            PinnacleOctober 2010

                                                                                                              About the Author                           Improving Commercial Casualty Claims
                                                                                                                                                                                                                                                   PinnacleDecember 2010

                                                                                                                                                                                                                                                   About the Author                           Does your 831(b) captive quack?

  Joseph A. Herbers (with two industry colleagues) presented a top-notch
                                                                                                                                                         Handling with Predictive Analytics                                                                                                   By Peter S. Rauner, FCAS, MAAA

                                                                                                                                                         By Robert J. Walling, III, FCAS, MAAA                                                                                                We have all heard the adage, “If it looks  faced with paying Uncle Sam taxes on
                                                                                                                                                                                                                                                                                              like a duck and quacks like a duck, it’s   the entire Schedule K-1 income.
                                                                                                                                                         Insurance companies are constantly           variables such as the likelihood of fraud,                                              probably a duck.” Although this approach In an attempt to maximize the client’s
                                                                                                                                                                                                                                                                                              may work for the average observer, under after-tax income, the owner’s financial

                                                                                Available in our
                                                                                                                                                         seeking competitive advantages that          attorney involvement, or a verdict for the

  educational session, a user’s guide to writing a good actuarial report,
                                                                                                                                                                                                                                                                                              closer scrutiny the trained eye can easily planning consultant may recommend an
                                                                                                                                                         will result in superior underwriting         plaintiff.
                                                                                                                                                                                                                                                                                              distinguish between a Mallard duck and 831(b) captive insurance company. By
                                                                                                                                                         results. Over the last decade and more,
                                                                                                                                                                                                      Target variables related to loss severity                                               a Muscovy duck.                            setting up an 831(b) captive insurance
                                                                                                                                                         many insurers have looked to predictive
                                                                                                                                                         analytics to develop sophisticated pricing   are particularly interesting and include                                                Such is the case with captive insurance    company and issuing insurance policies
                                                                                                                                                         tools. As predictive modeling moves          useful measures to triage newly reported                                                companies and well-disguised trust         naming the business and/or the business
                                                                                                                                                         from an underwriting best practice           claims such as the:                          Peter S. Rauner                            accounts. Both can be established in       owner as the named insured, the owner
                                                                                                              Robert J. Walling, III                                                                                                                                                          exotic vacation destinations for the       can deduct up to $1.2 million in premium

  that was voted the “Best Session” by seminar attendees.
                                                                                                                                                                                                                                                   FCAS, MAAA

                                                                                Knowledge Center.
                                                                                                                                                         to an industry standard, claims data          • Likelihood of severity more than twice
                                                                                                              FCAS, MAAA                                 mining applications are becoming a                                                                                                   primary benefit of their owners. Both can payments as business expenses and
                                                                                                                                                                                                         the average for a given injury type       Mr. Rauner is a Senior Consultant with     be used as a means of inter-generational retain 100% of the underwriting profit if
                                                                                                              M     r. Walling is a Principal and        fertile new way to improve commercial         • Likelihood of a claim exceeding a self-   Pinnacle Actuarial Resources, Inc.         wealth transfer. In fact, a Regulation     no claims are paid. At the end of the day,
                                                                                                                    Consultant in Pinnacle's             casualty insurance underwriting                 insured retention                         and manager of its Chicago, Illinois       114 Trust account can even be used         the business owner will have saved as
                                                                                                              Bloomington, Illinois office. He is a      results. When predictive analytics are        • Non-economic damages greater than         office. He is a Fellow of the Casualty     within the context of a captive insurance much as $420,000 in taxes per year which
                                                                                                              Fellow of the Casualty Actuarial Society   applied to workers compensation and             X% of total losses                        Actuarial Society (CAS) and member         company to manage its assets. The          can be used to fund future risk exposures
                                                                                                              (CAS) and a member of the American         medical professional liability insurance                                                  of the American Academy of Actuaries

  Δ Paul A. Vendetti spoke on the subject of ‘reinsurance risk transfer’at
                                                                                                                                                                                                       • Defense costs greater than Y% of total                                               primary difference between the two         or taken as profit distributions in the
                                                                                                              Academy of Actuaries (AAA). He holds       claims data, the data provides powerful                                                   (AAA). He is a member of the AAA’s
                                                                                                                                                                                                         losses                                                                               is that, when "certain criteria are met,"  form of capital gains. Further, the captive
                                                                                                                                                                                                                                                   subcommittee on Medical Professional

                                                                                                              a B.S. in Mathematics Education from       business intelligence. Some companies                                                                                                captive insurance company policyholders insurance company structure affords the
                                                                                                              Miami University.                          are outperforming their peers by using       Predictive analytics focusing on claims      Liability and former member of the
                                                                                                                                                                                                                                                   CAS’ Committee on Health Care Issues.      can deduct their contributions (a.k.a.     additional benefits of protecting assets
                                                                                                              Mr. Walling is a frequent industry         predictive analytics applications such as    applications go beyond the traditional                                                  premium payments) as operating             from creditors and efficiently transferring
                                                                                                              speaker on predictive modeling,            case reserving systems, proactive claims                                                  He holds a M.S. degree in Actuarial
                                                                                                                                                                                                      modeling techniques currently popular                                                   expenses against otherwise taxable         wealth to future generations.
                                                                                                              commercial lines ratemaking, captive                                                                                                 Science from Ball State University and
                                                                                                                                                         protocols based on scoring claims data,      for pricing applications. Decision trees                                                income. Contributions to trust accounts Although the results of the financial
                                                                                                              insurance, and medical malpractice                                                                                                   a B.S. degree from Earlham College.

  the Blackman Kallick Insurance Conference in November, ‘10.
                                                                                                                                                         and fraud monitoring tools. Applications     and neural networks, for example,                                                       are not deductible.
                                                                                                              topics.                                                                                                                              Mr. Rauner has provided formal                                                        planner’s research is all factual, there’s
                                                                                                                                                         such as these are reducing claim             are analytic techniques that replicate                                                  What are these “certain criteria”? We       another saying that goes, “If it sounds
                                                                                                                                                                                                                                                   Statements of Actuarial Opinion in
                                                                                                              In the area of predictive modeling, Mr.    frequencies and severities, cutting claims   intuitive aspects of the claims process,                                                will get back to that in a moment. First,   too good to be true, it probably is.” In
                                                                                                                                                                                                                                                   the United States as well as several
                                                                                                              Walling has been involved in:              defense costs and improving efforts to       but are not well suited for pricing          offshore domiciles. His clients come       consider an individual of high net worth    fact, the business of insurance is a highly
                                                                                                              Δ Ratemaking analyses including            identify and combat fraud.                   applications.                                from a broad range of industries           seeking to retain as much hard earned       regulated industry under the watchful
                                                                                                                 implementation of innovative risk                                                                                                 including healthcare, education,           income as possible. Assume a business       eyes of interested parties including
                                                                                                                 classification plans and underwriting   For the purposes of this monograph,         Challenges and opportunities for              technology, construction and retail,       generates $20 million in annual revenue     the National Association of Insurance
                                                                                                                 scorecards                              predictive analytics are defined as any     predictive analytics depend greatly           among others. To this end, he has

  Δ Roosevelt C. Mosley, Jr., spoke on the subject of ‘credit’ at the
                                                                                                                                                                                                                                                                                              and passes along $5 million in annual       Commissioners, the Federal Trade
                                                                                                                                                         statistical technique used to analyze how on the type of coverage. Both health            gained valuable insights and developed
                                                                                                              Δ Claims studies and utilization reviews                                                                                                                                        profits to its owner(s) in the form of a    Commission, the Securities and Exchange
                                                                                                                                                         a group of characteristics, such as rating  and personal lines insurance have the         strong relationships with captive owners   Schedule K-1 distribution. At the end       Commission, and the Internal Revenue
                                                                                                              Δ Agency management analyses               or demographic factors, estimate a target advantage of large volumes of claims            and managers, brokers, regulators          of the tax year, the owner’s accountant     Service (IRS) as well as several industry
                                                                                                              Δ Evaluations of experience and            variable, like claim frequency or severity. with low average claim sizes that tend to     and auditors.                              advises that the maximum allowable          trade and consumer protection groups.
                                                                                                                schedule rating plans                    The claims arena offers many new target settle quickly.                                   During his career, Mr. Rauner has          pre-tax deductions have already been        Specifically, the IRS is very interested in
                                                                                                              Δ Analyses of closed claim databases                                                                                                 presented on a variety of topics           taken and the business owner(s) are now     transactions just like the one described
                                                                                                              Δ Territory refinement analyses                                                                                                      including alternative risk financing,

  Casualty Actuarial Society (CAS) Annual Meeting in November, ‘10.
                                                                                                                                                                                                                                                   medical professional liability and
                                                                                                              Mr. Walling may be contacted at                               ...companies are outperforming                                         workers compensation.                                           ...the captive insurance company
                                                                                                              309 · 807 · 2320                                              their peers through predictive                                         Mr. Rauner may be contacted at                             structure affords the additional benefits
                                                                                                                                                                                                           630 · 457 · 1296                                            of protecting assets from creditors and
                                                                                                                                                                            analytics applications....                                                                  efficiently transferring wealth to future

Insider 2
                                                                                                                                                                                            Robert J. Walling, III, FCAS, MAAA                                                                                                                Peter S. Rauner, FCAS, MAAA
Reaching Our Global Audience:                              The impact of our Apex Discussion webinars on Pinnacle’s footprint

In early 2007, Pinnacle began researching new ways to help deliver                                                                                      301-Above
                                                                                                                              51-100      101-300
thought-provoking, industry-leading ideas to circles within our                                                      1-50
profession. This research eventually led to our monthly Apex                                                                                  Apex Participants
Discussion series, an hour-long webinar
providing expertise across a broad range of
actuarial topics - with the added bonus of
cost-free continuing education credits.
Using web-meeting technologies to facilitate
discussions, Pinnacle brings colleagues together
and provides analysis of current business topics,
trends and expected developments. Over the past 4
years, our webinars have reached 5,000 registrants in
45 countries spread around the globe. This combination
of thought leadership and use of an existing social platform has
helped attract global attention to our actuarial and management
consulting services company.
Our approach is designed to communicate sometimes complex
subject matter in plain language connecting our broad-reaching
audience via WebEx™ technology. Some of the more popular topics
have included:
  •   Update on medical malpractice market                                                             ...Pinnacle brings colleagues together
  •   State of the personal lines market                                                                   and provides analysis of current
  •   Applications of predictive modeling                               N
                                                                                                       business topics, trends and expected
  •   Use of credit scores in insurance                                                                             developments.
  •   Usage Based Insurance (UBI)
Our increased sphere of influence is due to our use of web-meeting technology as a
media outlet. For Pinnacle, utilizing a specific part of the social platform has expanded                          Ryan Haas, Senior Information
our role as a national leader in the industry, into a key role as an international influence                       Technology Support Technician
on the property/casualty insurance market. Pinnacle’s voice has indeed “gone global”. Δ                    

continued from front cover

While the Act specifically states that it does not preempt any state                 of Actuaries Property/Casualty Financial Soundness/Risk Management
insurance measure that governs an insurer’s rates, premiums,                         Committee (FSRM Committee) and A.M. Best. These studies confirm
underwriting or sales practices or state coverage requirements for                   that property/casualty insurance company insolvencies have been
insurance, it is clear that the Act would allow FIO to investigate capital           relatively infrequent and minor in scale in the past several years. The
and solvency requirements especially as it would relate to any potential             FSRM Committee investigated the implementation of Statement of
threat to the financial stability of the industry. In fact, within 18 months         Actual Opinion (SAO) procedures to assess what role these procedures
of the enactment of the Act, the Director must                                                                           have played in mitigating P/C insurer
submit a study and report on how to modernize and                                                                        insolvencies. In part - while the SAO,
improve regulation. The study is to be guided by the                 ...the SAO, by itself, cannot prevent               by itself, cannot prevent insolvencies, it
following considerations:                                            insolvencies, it can help identify those            can help identify those companies and/or
 i. effective systemic risk regulation                               companies and/or categories of                      categories of companies that could be in
 ii. capital standards and the relationship between                  companies that could be in trouble.                 trouble. In addition, regulators employ
      capital allocation and liabilities, including                                                                      SAOs as one of their primary tools in
      standards relating to liquidity and duration risk
                                                                    LeRoy Boison, Principal & Consulting Actuary         assessing the solvency and vulnerability
 iii. consumer protection for insurance products and                                                                     of the companies under their domain.
      practices, including gaps in state regulation                                                                      “Future steps” noted include:
 iv. the degree of national uniformity of state insurance regulation                    • Periodic studies of the causes of P/C company insolvencies should
 v. the regulation of insurance companies and affiliates on a                             be undertaken to provide insight into the drivers of insolvencies and
      consolidated basis                                                                  how they evolve over time
 vi. international coordination of insurance regulation                                 • Future studies should include ERM methodologies to help
Key focal points which we think will be debated in the coming months:                     identify those companies with significant insurance risk, including
                                                                                          underwriting, reserving and operational risk
   • how well has state regulation worked regulating the solvency of                    • Data gleaned from SAOs should be aggregated and reviewed to
      insurance companies                                                                 determine their effectiveness, including discussions of risk factors
   • what if any improvements could/would be realized if this was                         and RMAD definitions
      regulated at the federal level
                                                                                     So what improvements would federal regulation bring
State regulation (notwithstanding other possible issues which may exist              to the table? It appears to us this is a solution in search
with areas that are excluded from the scope of the FIO’s authority) has              of a problem. Δ
worked well when it comes to regulating the financial solvency of the                                                  LeRoy Boison, FCAS, MAAA
industry. This is supported by a recent study by the American Academy                                      
                                                                                                                                                         Insider 3
   Pinnacle names Bryan Isbell as                                                                                                                                                                                                                                                                                                                Pinnacle
   Director of Information Technology                                                                                                                                                                                                                                                                                                       Community
                         Bryan Isbell will provide overall
                         leadership and direct the firm’s technology
                         efforts to ensure continual evolution                                                                                                                                                                                                                                                                   Δ Pinnacle Leadership and Illinois State University
                         and execution of innovative technical                                                                                                                                                                                                                                                                     Joseph A. Herbers became a member of the Illinois State University,
                         strategies maintaining Pinnacle’s position                                                                                                                                                                                                                                                                Katie School of Insurance and Financial Services, Insurance Advisory
                         as a forward-looking firm. With 13 years                                                                                                                                                                                                                                                                  Board of Executives.
                         successfully implementing aggressive
                         technologies, Isbell celebrates 8 years                                                                                                                                                                                                                                                                 Δ Pinnacle Promotes Knepler and Leesman to
                         championing Pinnacle’s brand-initiatives.                                                                                                                                                                                                                                                                 Senior Actuarial Analyst
  Isbell’s leadership and a strong team enables Pinnacle to                                                                                                                                                                                                                                                                        Lee W. Knepler and Kirk J. Leesman have been promoted to positions
  continue to provide world-class service across the enterprise.                                                                                                                                                                                                                                                                   of Senior Actuarial Analyst. Both Knepler and Leesman perform at
                                                                                                                                                                                                                                                                                                                                   exemplary levels communicating complex technical results of the
                                                                                                                                                                                                                                                                                                                                   actuarial analyses across a wide range of customers.
    Joseph A. Herbers Celebrates 25 Year Milestone
    Herbers joined Tillinghast in 1985, spinning off with key colleagues                                                                                                                                                                                                                                                         Δ Brian Wetter joins Pinnacle as
      in 2003 to form Pinnacle Actuarial Resources, Inc., culminating                                                                                                                                                                                                                                                              Information Technology Support Analyst
         in 25 years of exceptional service on behalf of our clients.                                                                                                                                                                                                                                                              Wetter brings a career knowledge-base of working within large
     Congratulations from the Principals and the entire Pinnacle staff.                                                                                                                                                                                                                                                            corporate environments, generalizing in "all things tech." He is enjoying
                                                                                                                                                                                                                                                                                                                                   the opportunities not readily available in the larger IT landscape - but
                                                                                                                                                                                                                                                                                                                                   finding "absolutely necessary at Pinnacle."
   Pinnacle’s expertise showcased in
   3 new brochures                                                                                                                   Healthcare                                                                     Predictive                                                                   Trucking
                                                                                                                                                                                                                                                                                                                                 Δ Pinnacle provides volunteer leadership in communities
                                                                                                                                                                                                                                                                                                                                   across the enterprise - and beyond!
                                Pinnacle Expertise                                             Pinnacle Expertise
                                                                                  About Pinnacle                                                              About Pinnacle Pinnacle Expertise                                              About Pinnacle
                                Pinnacle’s team of experienced consultants     Pinnacle Actuarial Resources, Inc. isteam of experienced consultants
                                                                                                           Pinnacle’s an                                                                Pinnacle offers
                                                                                                                                                           Pinnacle Actuarial Resources, Inc. is an a team of experienced                    Pinnacle Actuarial Resources, Inc. is an                                      and

                                understands your unique challenges as part                                 know the unique challenges you face with
                                                                               independent actuarial consulting firm that also                                                          consultants who know the unique requirements
                                                                                                                                                           independent actuarial consulting firm that also                                   independent actuarial consulting firm that also
                                                                               provides data and risk management services. modeling.Our expertise
                                                                                                                                                                                                                    Modeling                                                                     Transportation
                                of the healthcare industry. Our expertise                                  the use of predictive                                                        of the trucking and
                                                                                                                                                           provides data and risk management services. transportation industries.            provides data and risk management services.
                                comes from years of working on similar                                     comes from of
                                                                               We’re large enough to provide a wealth years of working on a variety of                                  This wealth of
                                                                                                                                                           We’re large enough to provide aexpertise comes from years of working on           We’re large enough to provide a wealth of
                                                                                                           projects with our customers.

                                projects with our customers.                   expertise and world-class solutions — yet small                                                          similar projects with
                                                                                                                                                           expertise and world-class solutions — yet small our customers.                    expertise and world-class solutions — yet small
                                Legislative costing including:                                             Claims - Data analysis
                                                                               enough to be flexible, timely and cost-effective. techniques can uncover    enough to be flexible, timely and cost-effective. worked with trucking and
                                                                                                                                                                                        In the past, we have                                 enough to be flexible, timely and cost-effective.
                                                                                                           how key factors such as reporting delays,                                    transportation customers on such projects as:
                                •	 Caps on non-economic damages                                              staff, Pinnacle ranks
                                                                               Owned by our professionalvendors, independent adjusters, attorney           Owned by our professional staff, Pinnacle ranks                                   Owned by our professional staff, Pinnacle ranks

                                                                                                                                                                                                                                                                                                                                   Pinnacle encourages employees to bring forward opportunities while
                                •	 Attorney contingency fees                                               involvement, injury type and claimant
                                                                               among the top 10 largest property-casualty                                                               Funding and feasibility studies for captives
                                                                                                                                                           among the top 10 largest property-casualty                                        among the top 10 largest property-casualty
                                •	 Medical review panels                                                   characteristics impact your claims process.
                                                                               actuarial firms in the United States. Our repu-                                                          and RRGs owned
                                                                                                                                                           actuarial firms in the United States. Our repu- by trucking and public livery     actuarial firms in the United States. Our repu-
                                •	 Physician apology or “I’m Sorry” laws       tation for uncompromisingPricing - Identifies rating plan elements that
                                                                                                             professionalism,                              tation for uncompromisingcompanies
                                                                                                                                                                                         professionalism,                                    tation for uncompromising professionalism,
                                •	 Government insurance programs                                            service explains why
                                                                               expertise and outstanding can be more accurately priced or added for                                     service explains why
                                                                                                                                                           expertise and outstanding Loss reserve analyses for transportation                expertise and outstanding service explains why

   visit our website to explore the details
                                •	 Collateral source rules                     more and more organizations consider Pinnacle
                                                                                                           additional risk segmentation.                   more and more organizations consider Pinnacle captives and self
                                                                                                                                                                                        insurance companies,                                 more and more organizations consider Pinnacle
                                •	 Statutes of limitations                     to be the firm of choice for actuarial services.                                                         actuarial services.
                                                                                                                                                           to be the firm of choice for insurance programs                                   to be the firm of choice for actuarial services.
                                                                                                           Customer Value - Develops long-term view of
                                Ratemaking studies for medical professional                 Customized solutions. value and determines how to best                       Customized solutions.development for trucking, taxi and
                                                                                                                                                                                        Product                                                            Customized solutions.
                                liability insurance products

                                                                                                                                                                                                                                                                                                                                   continuing the commitment to ‘make a difference’ in our local, regional,
                                                                                            Clear communication.
                                                                                                           use this information for more profitable long                 Clear communication. insurance products, including
                                                                                                                                                                                        school bus                                                         Clear communication.
                                Captive funding and feasibility studies                         Extreme service.
                                                                                                           term business decisions.                                         Extreme service.
                                                                                                                                                                                        predictive modeling, rate level indications, class                    Extreme service.
                                Loss reserve analyses for insurance            They’re all part of the Pinnacle Difference. modeling marketing
                                                                                                        Marketing - A predictive                                                        plan analysis and competitive analysis
                                                                                                                                                           They’re all part of the Pinnacle Difference.                                      They’re all part of the Pinnacle Difference.
                                companies, captives, risk retention groups                              analysis helps you effectively target potential                               Benchmarking - comparing rates, expense
                                and self insurance programs                                             new business.                                                                 provisions, claims characteristics and loss
                                Actuarial studies for government insurance           Articles and Resources
                                                                                                  Price Optimization - Takes into account many                Articles and Resources behaviors for similar programs
                                                                                                                                                                             development                                                           Articles and Resources
                                operations including patient compensation         Pinnacle’s experts have spoken widely and                                    Pinnacle’s experts have spoken widely programs - including risk transfer
                                                                                                                                                                                       Reinsurance and
                                funds, birth-related neurological injury
                                                                                                          business considerations - competitiveness,                                                                                      Pinnacle’s experts
                                                                                                                                                                                                                                Applying Predictive have spoken widely and

                                                                                                                                                                                                                                                                                                                                   and global communities such as: Habitat for Humanity in the U.S. and
                                funds, and joint underwriting associations
                                                                               authored a number of thought leadership articles expected profitability,
                                                                                                          new business flow and                                                        and contract articles
                                                                                                                                                            authored a number of thought leadershippricing                             authored a number of thought leadership articles           Actuarial Services for
                                                                                        and monographs,losses and retention - to take your pricing and
                                                                                                           available at:
                                                                                                                                                        for a
                                                                                                                                                                     and monographs, available at:
                                                                                                                                     Actuarial                                       Analytics to
                                                                                                                                                                                                                                                and monographs, available at:
                                Regulatory assistance including rate filing
                                                                                                          profitability to the next level.                                     Analysis of transportation reinsurance                          a Specialized Industry
                                reviews, financial examination support and                                                                   Dynamic Industry                  programs                                                  Insurance
                                review of captive applications                                      Retention and Conversion Analysis
                                Analysis of medical malpractice                   Contact     Information the likelihood that an insurer
                                                                                                    Determines                                                Contact Information                                                            Contact Information
                                                                                                    can write or retain a risk based on its risk
                                reinsurance programs including risk transfer                        characteristics, marketplace competitiveness,
                                and contract pricing
                                                                                                                                      Industry Expertise
                                                                                                    marketing channels and historical price                                                                         Using Analytics to                                                           Industry Expertise

                                                                                                                                                                                                                                                                                                                                   Haiti, Relay For Life, Easter Seals, St. Jude Children’s Research Hospital,
                                Industry studies for healthcare associations                        changes.
                                and policymakers
                                                                                                                                      Customized Service
                                                                                                        Territory Definitions - Helps insurers develop                                                              Drive Innovation                                                             and Customized
                                                                                                        state-of-the-art rating territories by applying
                                                                               Pinnacle Actuarial Resources, Inc.
                                                                                                      territorial clustering and smoothing.                Pinnacle Actuarial Resources, Inc.                                                Pinnacle Actuarial Resources, Inc.
                                                                                                                                                                                                                                                                                                 Service Set Pinnacle
                                                                                                      Vehicle Characteristics -Assesses the impact                                                                       Apart
                                                                               2817	Reed	Road,	Suite	2		·		Bloomington,	IL	61704
                                                                                                           of personal and/or commercial vehicle           2817 Reed Road, Suite 2 · Bloomington, ILcan we
                                        How can we help you today?                                                                                                                           How 61704           help you today?             2817 Reed Road, Suite 2 · Bloomington, IL 61704

                                                                               Phone:	(309)	807-2300		·		Fax:	(309)	807-2301 claims and rates.
                                                                                                           characteristics on                              Phone: (309) 807-2300 · Fax: (309) 807-2301                                       Phone: (309) 807-2300 · Fax: (309) 807-2301

                                                                                                                                                                                                                                                                                                                                   Illinois State University scholarship funds, Children’s Miracle Network,

   we invite you to...
                              10/2010                                                            10/2010                                                                     10/2010

                                                                                                                                                                                                                                                                                                                                   along with local food bank contributions, local youth enrichment
                         the Pinnacle Difference!                                                                                                                                                                                                                                                                                  programs, and local economic development programs.

Bloomington • Atlanta • Chicago • Columbus • Detroit • Indianapolis • New York • San Francisco • Saratoga Springs 309 • 807 • 2300                                                                                                                                                                                                                                        

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P.O. Box 6139                                                                                                                                                                                                                                                                                                                                                                      BLOOMINGTON, IL
Bloomington, IL 61702-6139                                                                                                                                                                                                                                                                                                                                                           PERMIT NO. 111

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