Women In Insurance. A Tribute To Ruth E. Salzmann

Ruth E. Salzmann was, among many other things, the first woman officer attainting the position of secretary of underwriting at the Insurance Company of Northern America (INA, which is now part of CIGNA) in 1962. In 1968 she re-joined her previous company Sentry Insurance as Vice President and Actuary, the first woman Vice President of the company. Later, she also became the first woman to serve on the Sentry Board of Directors. When she retired in 1984, her title was Executive Vice President of Actuary. In 1978 she became the first woman President of the Casualty Actuarial Society and developed the mathematical tables ‘The Salzmann Curves’, which became the primary basis for pricing property insurance. More on that later…

Underwriting Profits and Investment Income

Ruth E. Salzman analysed the underwriting profits and investment income topics in depth. Underwriting profit is the amount of premium that remains and earned by the insurer after all losses have been paid out and the deduction of administrative expenses. It is an important part of financial planning within insurance companies. Investment income is the ratio of the next investment income earned from an insurance providers premium. This is the income from investment activities rather than the company’s operations.

Estimated Liabilities for Losses & Loss Adjustment Expenses

Ruth E. Salzmann wrote and published a book that analysed and discussed in depth the estimated insurance liabilities for losses and loss adjustment expenses in the insurance industry. Losses and loss-adjustment expenses are an insurance company’s proportion of reserves that have been set aside for unpaid losses. It also covers costs of investigation and adjustment for losses.

The Salzmann Curves

In 1978 Ruth E. Salzmann developed the Salzmann Curves. This was the primary basis for pricing property insurance for 40 years. The Salzamnn Curves were a calculation between homeowner’s fire losses and the corresponding level of insurance. If you are not a math or insurance whiz, this basically means she created a pricing structure that showed what a policy premium should cost based on the value of items lost. The higher the cost to replace the items, the higher up the curve your travel to discover the cost that should be associated with that particular premium.

Ruth came about her calculations by using accident data from 1960 supplied by the then Insurance Company of North America (INA). Each fire claim was expressed as a percentage of the amount of insurance on the policy coverage. This is known as the insurance claims adjuster.