Although the essence of actuarial work is the identification, management and mitigation of risk, there is no comprehensive document describing how to do that for managed care products. There are, of course, some elements of risk, such as anti-selection, that are well-documented. Yet, there are other elements of risk, such as administrative processes, that are not very well documented. In order to be effective risk managers, health actuaries need to more thoroughly understand all the elements of risk.

With that in mind, the Health Section Research Committee is interested in producing a report that would comprehensively document the identification, management, and mitigation of the risks with which health actuaries need to contend.

The Health Section Research Committee is seeking researchers to develop and write a guide to identifying, managing, and mitigating the risks that health actuaries typically face. The following types of risks are among those that would be considered:

• General risks
• Operational risks
• Legislative risks
• Balance sheet risks
• Pricing discipline
• Asset risks
• Emerging risks

The paper would include the full spectrum of risks from identifiable measureable risks to black swan type events.

Questions that would be considered include:

• How can a health actuary manage to minimize risks overall?
• What unique characteristics of risk are present in health care products?

The report would be based on a combination of a survey and focused interviews with experienced health actuaries and other risk experts.

Those interested in submitting a proposal may be interested in reviewing a report authored by Max Rudolph and sponsored by the Health Section Research Committee that explored Enterprise Risk Management applied to health organizations. View the report.

To facilitate the evaluation of proposals, the following information should be submitted:

• Resumes of the graduate student(s) expected to participate, indicating how their background, education and experience bear on their qualifications to undertake the research. If more than one researcher is involved, a single individual should be designated as the lead researcher and primary contact. The person submitting the proposal must be authorized to speak on behalf of all the researchers as well as for the firm or institution on whose behalf the proposal is submitted.
• An outline of the approach to be used, emphasizing issues that require special consideration. Details should be given regarding the techniques to be used, collateral material to be consulted, and possible limitations of the analysis.
• Cost estimates for the research, including computer time, salaries, report preparation, research costs, etc. Such estimates can be in the form of hourly rates, but in such cases, time estimates should also be included. Any guarantees as to total cost should be given and will be considered in the evaluation of the proposal. While cost will be a factor in the evaluation of the proposal, it will not necessarily be the decisive factor.
• A schedule for completion of the research, identifying key dates or time frames for research completion and report submissions.
• Ideas regarding the form and distribution of the final report, both for immediate release and for permanent reference (e.g., submission to North American Actuarial Journal, Other health care journals, SOA Monograph Series, CD ROM).
• Other related factors that give evidence of a proposer's capabilities to perform in a superior fashion should be detailed.

The SOA Health Section Research Committee is responsible for the selection of the proposals to be funded. Input from other knowledgeable individuals also may be sought, but the Committee will make the final decision. The SOA's Research Actuary will provide staff actuarial support. A Project Oversight Group (POG) will be appointed to oversee the research along with the experienced researcher who is recruited.

Any questions regarding this RFP should be directed by fax, or email to:

Steven Siegel
SOA Research Actuary
email: ssiegel@soa.org
f: 847.273.8578

If you intend to submit a proposal, please send written notification by September 15, 2011 to:

Barbara Scott
email: bscott@soa.org
f: 847.273.8592.

Please e-mail a copy of the proposal to: Barbara Scott at bscott@soa.org.

Proposals must be received no later than October 1, 2011. It is anticipated that all researchers who have submitted proposals will be informed of the status of their proposal no later than October 31, 2011.

Note: Proposals are considered confidential and proprietary.

The SOA Health Section Research Committee reserves the right to not award a contract for these research topics. Reasons for not awarding a contract could include, but are not limited to, a lack of acceptable proposals or a finding that insufficient funds are available to proceed. The SOA also reserves the right to redirect the projects as is deemed advisable. The SOA intends to copyright and publish the results of this research. The research will be considered work-for-hire and all rights thereto belong to SOA. However, appropriate credit will be given to the researcher(s).