Kerper Bowron Method Earns Peer Review, National Media Recognition

Patent-pending actuarial method accepted by Risks journal and featured in Business Alabama as momentum builds for 2026 implementations

BIRMINGHAM, Ala.--(BUSINESS WIRE)--Kerper and Bowron LLC today announced that its patent-pending Kerper Bowron Method, a groundbreaking innovation for service contract and extended warranty accounting, has been formally published in the journal Risks (MDPI), a peer-reviewed international actuarial journal, and was featured in Business Alabama, the state's leading business publication.

The back-to-back recognitions mark a turning point for the Birmingham-based firm, which introduced the method publicly in January 2026. Since then, the Kerper Bowron Method has attracted attention from financial institutions, service contract administrators, and insurance professionals seeking contract-level precision in loss projection and revenue recognition.

The Kerper Bowron Method replaces industry-standard aggregate earning approaches with month-by-month probabilistic cash-flow projections for every individual contract. By drawing on point-of-sale data including term, mileage, coverage, deductible, vehicle profile, and price, the method generates auditable, contract-specific accounting that adapts to actual experience rather than backward-looking industry averages.

The journal submission represents the first formal academic validation of an approach that addresses longstanding challenges across multiple regulatory frameworks, including Solvency II, IFRS 17, and ASC 606. The Kerper Bowron Method significantly improves accuracy in loss estimation, cancellation forecasting, and revenue recognition. The Business Alabama feature highlights the method's roots in Birmingham's emerging fintech ecosystem.

"When we introduced the Kerper Bowron Method, we believed the industry was ready for a more precise approach to service contract accounting,” said John Kerper, FSA, MAAA. “The peer review acceptance and the Business Alabama feature confirm that belief."

Building on more than two decades of specialized actuarial experience in the service contract industry since the firm’s founding in 2003, the Kerper Bowron Method is generating strong industry interest, producing stable and reliable forecasts, and attracting additional administrators and key players who are now coming aboard for implementation.

“Much like Black-Scholes revolutionized options pricing, the Kerper Bowron Method has the potential to become the defining financial framework for the service contract space,” said Lee Bowron, ACAS, MAAA. “Extensions of this technique will open significant new lending opportunities across the United States and create entirely new derivative markets, while fundamentally reducing capital allocation.”

Business Alabama Article: https://businessalabama.com/birmingham-firm-rethinks-warranty-accounting/
Risks MDPI: https://www.mdpi.com/2227-9091/14/3/44
Full Paper: https://tinyurl.com/KBMethod
SSRN Preprint: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5973054#

About Kerper and Bowron LLC

Kerper and Bowron LLC is an actuarial, accounting, and insurance consulting firm located in Birmingham, Alabama, founded in 2003 by John Kerper and Lee Bowron. The firm offers deep expertise in the F&I industry and proven skills in reinsurance, pricing, loss projections, cash flow projections, and financial reporting. Irish Trinity LLC, formed in 2025, was established to develop the intellectual property underlying the Kerper Bowron Method. For more information, visit www.kerper-bowron.com.