Notes on the new fair value accounting rules

Last week the U.S. and international accounting standards boards (FASB and IASB, respectively) agreed on a common standard for fair value measurement and disclosure. These, of course, will affect U.S. actuaries in how they will value liabilities when we begin to discount loss reserves, something that seems increasingly likely. The agreement is outlined, vaguely, in [...]

S&P mulls the new accounting proposals

From PropertyCasualty360: A recent analysis from Standard & Poor’s concludes that “changes in interest rates could cause potentially significant swings in earnings and capital.” The ratings firm said that although its credit analysis focuses on the financial condition of a company regardless of accounting, changes like a new format for the balance sheet, income statement or [...]

IASB vs. FASB in one slide

I crib this slide (pdf) from the opening session of the Casualty Actuarial Society’s loss reserving seminar last month in Orlando. The slide shows concisely the key difference between how IASB wants to measure loss reserves and what FASB is contemplating. (IASB sets international accounting standards, which each country adopts independently. FASB sets standards for [...]

Actuarial tidbits

A couple of things I’ve been saving up: The U.S. accounting board, FASB, seeks comment on financial reporting rules for insurance companies. The wonky background: The international accounting board (IASB) is overhauling its rules governing insurance, and the U.S. organization wants to follow along, though there will be some differences. (I wrote about the IASB [...]

First half industry results: Following the waterfall

ISO/PCI released first-half U.S. P&C results yesterday. First off, the numbers: First half net more than doubled, to $16.5 billion this year from $6 billion in 2009. Return on surplus followed suit of course, to 6.3% from 2.6%. This is kind of puny compared with the S&P500, which is returning 10.5%. Then there is the [...]

Wonky talk: New accounting rules for insurance contracts proposed

Reserving actuaries are, basically, experts in handling one really big liability – what insurers owe on the contracts they’ve underwritten. So when the International Accounting Standards Board (IASB) posts an exposure draft on standards for reporting insurance contracts, it’s big news in the worldwide actuarial community. The issue also resonates in the United States, as [...]