Finance & Investment Panel Finds Prophet of Profit Elusive

Summer 2002 News
Message from the President
Safety Records Improve, U.S. Study Shows
Finance & Investment Panel Finds Prophet of Profit Elusive
Claims Experts Eye Program to Manage Chronic Pain
Dim Sum
Around AASCIF
Coping with MSP in Ohio
Business Continuity Planning Now Moves to Center Stage
Upcoming Events
Caution: 'Disability's' Connotations Differ Under ADA and Workers' Comp
IT Committee Eyes Ways to Manage Internet Risks

By Dave Sandy, North Dakota Workers Compensation

While many insurers have been reporting underwriting losses lately, the added woes of poor investment performances and rising reinsurance costs have many of us wondering what’s going to hit us next. Looking back, 2001 was probably a year that was due to come sooner or later. The stock market bounced up and down in reaction to an uncertain economy, and interest rates were continually reduced to hold back recession.

For appropriate reasons “Lessons Learned from 2001” has been selected as the theme for this year’s Finance and Investment Workshop. Our workshop has been scheduled for September 22-24, 2002 in San Diego, California and is targeted to give participants a better understanding of the past year as well as provide some valuable information for the future. “The intent is to provide an interactive forum where AASCIF members can benefit from exposure to different investment opportunities and strategies,” said workshop chair Leslie Dawe from the State Compensation Insurance Fund of California.

The workshop is expected to draw more than 50 participants from the U.S. and Canada. The format is structured to feature presentations on investment performance and strategies, economic forecasts, technological developments, optimizing surplus, and reinsurance programs, as well as to allow for the exchange of ideas through networking. “The workshop also serves as an excellent opportunity for AASCIF members to share ideas as well as to learn from one another through the individual lessons we have each learned during 2001,” added Dawe.

A welcoming social and dinner are planned for Sunday evening for participants arriving on the weekend. The workshop programs will begin Monday morning and extend through noon on Tuesday.

Workshop Preview

This year's workshop will feature a well-balanced selection of educational programs for all participants. Here’s a preview of some of the topics that will be addressed:

The annual AASCIF investment performance results will be presented and discussed. Highlighting successful investment performances within the AASCIF peer group has become one of the workshop’s keynote presentations over the years. The survey conducted of all 38 AASCIF members was coordinated again this year by Bob Merritt from the Injured Workers Insurance Fund of Maryland.

Another timely topic will involve fixed income investments. We all know that bonds increase in value as interest rates decline; however, the opposite effect holds true when interest rates rise. And so with interest rates being at the lowest level in almost 40 years, strategies need to be developed and implemented to ensure that your bonds can continue to add value as interest rates begin to rise sometime in the not-so-distant future.

So what’s up with the Dow these days? Equity investments are always ripe for discussion, especially now that the pretenders have been separated from the contenders. This year’s presentation on equity will feature a panel of experts in a “point/counter-point” discussion to illustrate the pros and cons of growth, value, and core equity investing styles.

Closely related to equity investing is the ever-changing global economy, where many variables need to be considered to develop accurate projections. No Finance and Investment Workshop would be complete without looking ahead, and the best way to anticipate what’s going to happen in the future is with a professional analysis and forecast of the economy.

An interesting addition to this year’s workshop will be the focus on reinsurance. More important than ever, reinsuring risk has grabbed the attention of almost everyone, especially now that some are viewing reinsurance as an investment decision. Whether you're a monopoly or operating in a competitive environment, you're not immune from the effects of this industry. How can you justify the cost? What's going to happen in the future? A panel of experts will discuss reinsurance from the broker, reinsurer, and actuarial perspectives.

Another item on the Finance & Investment agenda this year is an initiative to provide more timely investment information utilizing the AASCIF web site. The goal is to create a universe of quarterly AASCIF investment results that can be shared for comparison and benchmarking purposes. A question was added to this year’s survey that will provide valuable information for developing this population.

Committee members include Chair Leslie Dawe (California), Advisor Jeff Tetrick (Colorado), Ralph Chase (Pennsylvania), Bing Garrido (New York), Mark Johnson (New Mexico), Shawn Johnson (Utah), Bob Merritt (Maryland), and Dave Sandy (North Dakota). The committee’s Executive Monitor is Lane Summerhays from the Workers Compensation Fund of Utah.

So make plans to be in San Diego September 22-24. The 2002 AASCIF Finance and Investment Workshop will be sure to provide you with some valuable information to benefit your organization.

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