Expanding Horizons, June 2001, Issue No. 24

Expanding Horizons
Newsletter of the Education and Research Section
Issue 24 – June 2001

36th ARC, August 9-11, Columbus OH QRS et al
A View from the Chair Sessions at Spring Meetings
IME Congress Summary of Minutes
It's Time to Vote!   April 17, 2001
  February 15, 2001
  January 9, 2001
Living to 100: Survival at Advanced Ages

Education and Research Section Council
James Broffitt and Esther Portnoy are Expanding Horizons co-editors.  Esther Portnoy edited this issue.

Education and Research Section membership is $15.00. We encourage you to join! Simply send a note indicating code #05-50-0100 along with your $15.00 payment to the SOA at P.O. Box 95918, Chicago, Illinois 60694. Payment may be made by check or credit card. The SOA accepts Visa, Mastercard or American Express. Please remember to include your card number, signature and expiration date.

Expressions of opinion stated herein are, unless expressly stated to the contrary, not necessarily the opinion or position of the Society of Actuaries, its Sections or Committees or the employers of the authors. The Society assumes no responsibility for statements made or the opinions expressed in the articles, criticisms, and discussions contained in this publication.

The Section would like to encourage articles and papers on education and research topics or subjects of interest to education and research actuaries. If you have an article or an idea for an article that you think might interest Section members, please contact the editors.

Copyright 2001 Society of Actuaries. All rights reserved.

36th ARC, August 9-11, Columbus OH

By now you have probably received the brochure describing the 36th Actuarial Research Conference. (If not, the Web site is http://www.math.ohio-state.edu/ARC2001.) The ARC each year attracts many of the actuaries in academic positions around North America, as well as practicing actuaries with related research interests and a few overseas visitors. Still, the group is small enough (typically around 100 registrants) so that all participants can attend each session and have the opportunity to mingle with fellow attendees at conference-related activities. Many participants come away with new friends, useful pointers on their research, and good ideas for future work.

This years conference is being organized by The Ohio State University and Nationwide Insurance, with a number of other professional and business sponsors. Sessions run for two and one-half days, Thursday morning through Saturday noon. On Saturday afternoon, free transportation will be available for visitors who would like to attend the Ohio State Fair.

The deadline both for early registration (at a $20 discount) and for submission of paper titles and abstracts is June 15.

A word of warning: because of the state fair, hotels are expected to fill up early. Campus housing is available for $23 to $45 per person per night. The official conference hotel is the Holiday Inn on the Lane (614-294-4848 or 800-465-4329); single or double rooms are available at $89 . Make your reservations now (unless, like me, you are lucky enough to have relatives in Columbus)

For additional information, write ARC 2001 Committee, Mathematics Department, The Ohio State University, 213 West 18th Avenue, Columbus OH 43210, or email one of the committee members (Steve Craighead, craighs@nationwide.com; Bostwick Wyman, wyman.1@osu.edu; Denise Witcher, dwitcher@osu.edu ).

Future conferences will be at Waterloo (2002) and Michigan (2003), with the site of the 2004 Conference yet to be determined.

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A View from the Chair
By Pat Pruitt

One of the duties of a chairperson is to attend the Council of Section Chairpersons meeting. Very possibly, many of you werent even aware that there was such a meeting. Im sure I wasnt until I was asked to fill in at one a couple of years ago. Its a one-day, semi-annual meeting held at a hotel near OHare Airport, for the convenience of those flying in for the day. (Its also pretty convenient for someone like me, from the Chicago area, which is why I kept getting asked to fill in for other people.) The person in charge is always the President-Elect, in this case, Jim MacGinnitie.

What do we do there? First, each Section gives a little report on its activities, so you get to find out what all the other Sections are up to. We talk about matters of common concern. A nice benefit of the meeting is getting to meet the other Section chairpersons. You get a chance to find out where their interests lie, and you may discover ways that Sections can help each other out.

At these meetings, we always get lots of information and handouts from SOA staff members. Lois Chinnock, who looks after the well-being of all the Sections, and Barb Choyke, whose Continuing Education staff does such a great job of managing to see that all the "shows" (meetings and seminars) go on were particularly helpful. (Although she was not at this particular meeting, I should mention that our own Section gets an enormous amount of help in all Section matters from Judy Yore.) Among the topics discussed was the Sections use of the SOA website. Our Section is one of the pioneers in terms of having our newsletter online, as well as ARCH. We are also one of the sections with a Web liaison, who is needed to keep the information on our Section up to date.

An issue that came up at this meeting was surplus in some Sections funds. The Education and Research Section, being one of the smallest, is not in the enviable position of having a huge surplus. The Sections that actually have more money than they know what to do with were encouraged to think of appropriate ways to use it, such as research projects. Our own treasury has to cover administrative expenses for the SOA, a fixed fee per member, which has been increasing a little each year, as well as some expenses such as meetings and postage. We are trying to be careful with how we use the money, which is one of the reasons our newsletter is now online rather than printed and mailed. One thing we have done occasionally is to help with the cost of bringing in a good speaker for a session at an SOA meeting. We feel that this is an appropriate use of our Section funds. Weve been trying to keep the dues level, in the face of increasing costs. If we do decide to raise them slightly, you should know that this was not a decision made without thought, and we are not being spendthrifts with the Sections money.

The Sections are a grassroots effort, and they have been very successful. There are now fifteen of them, but a sixteenth may be developing. Most SOA members belong to at least a couple of sections. Whether Sections are connected to a traditional area of actuarial practice, such as the Health or Pension Sections, or appeal to more than one segment of the actuarial audience, such as the Actuary of the Future or Management and Personal Development Sections, they provide useful services as well as a way for members with common interests to connect with each other.

We welcome your input and your participation. If you have an idea for a session or a seminar we could sponsor or an article for our newsletter, let us know. Please come to our Section breakfasts at the Spring and Annual Meetings, too. If you really want to get involved, you could indicate your willingness to be on the ballot for Section council next year. That reminds me dont forget to VOTE!

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IME Congress

The 5th International Congress on Insurance: Mathematics and Economics will be hosted by Penn State University, University Park, PA (USA), from Monday, July 23, through Wednesday, July 25, 2001.

The theme of the conference will be "Communicating Research Results." In keeping with the theme, presenters will be encouraged to emphasize the communication aspects of their presentations. To facilitate this, presenters will be invited (and provided with assistance, if desired) to make dynamic, computer-assisted presentations.

Submitted papers should concern a subject relevant to the aims and objectives of the international journal Insurance: Mathematics and Economics. This includes papers on the theory, models and computational methods of life insurance (including pension systems, social insurance, and health insurance), of non-life insurance, and of reinsurance and other risk-sharing arrangements. It also includes, under the heading of insurance economics, innovative insurance applications of results from numerical analysis, economics, operations research and management science, and risk management.

The meeting coordinator is Arnold Shapiro (afs1@psu.edu). For more information, please contact imeCongress@psu.edu.

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 Its Time to Vote!

Ballots for the Section elections will be mailed the first week in July. Take an active role in the election process! The slate for the Education and Research Section is impressive. Please take the time to review the election material and cast your ballot.

Leonard Asimow
Eli Donkar
Mary Hardy
Bryan Hearsey
Gordon Klein
Stuart Klugman
Krzysztof Ostaszewski
Virginia Young

Ballots must arrive in the SOA office no later than August 3 . Section members who do not receive the election mailing by July 18 should contact Lois Chinnock at the SOA office (phone: 847/706-3524; fax: 847/706-3599; e-mail: lchinnock@soa.org).

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Living to 100: Survival at Advanced Ages

The Society of Actuaries Committee on Life Insurance Research has organized an international symposium on mortality at advanced ages, to be held January 17-18, 2002 at the Swan Hotel in Walt Disney World, Orlando. The purpose is to assemble a group of actuaries, demographers, gerontologists, and others with expertise in high-age mortality to discuss, compare, and combine high-age mortality data. More than twenty papers from five countries have been accepted.

Registrants will receive copies of the papers in advance of the symposium. Typical sessions will include three or four 15-minute presentations of papers and a prepared discussion, followed by an opportunity for open discussion We expect that a number of the papers presented at the symposium will be published in NAAJ, and all papers should be available for purchase in some format following the symposium.

Chairman of the Project Oversight Group is Bob Johansen. As details are finalized, information will be available on the Continuing Education page of the SOA Web site. Watch this site for further details and registration forms.

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QRS et al
by Esther Portnoy

In the April issue of The Actuary, President Rob Brown discussed two parts of the Societys proposed "strategic plan" that may be of particular interest for E&R members. Those of us who are involved in preparing young people to enter the actuarial profession should be looking very carefully at "QRS" and the "alternative route." I hope the outline here will encourage you to read the full article and investigate these matters further.

"QRS" stands for Quantitative Risk Specialist, a phrase that might be applied both to actuaries and certain others, such as financial engineers, but not to all people who claim expertise in insurance. The distinction, Brown indicates, is largely in the word quantitative. He envisions a core skill set including mathematical topics (calculus, basic and some advanced probability and statistics, simulation) as well as economics and finance, but not the more specifically "actuarial" techniques such as pension mathematics or credibility theory. The intent is to provide a foundation that is both interdisciplinary and international. Brown believes that the QRS credential would have market value, and moreover, that many university programs, both undergraduate and MBA, could easily make modifications to qualify students for the QRS. Although not all people who earn the QRS will become actuaries, Brown anticipates that the heightened visibility would expand the pool of candidates.

Some others have expressed concern that this proposal weakens the technical base for our candidates, pushing aside more serious mathematical work until they have left campus. Undergraduates in mathematics or statistics may find it very difficult to cover the expanded finance and economics topics while also meeting degree requirements. Would the actuarial profession be well served if almost all our young actuaries were coming through business schools instead of liberal arts colleges?

The alternative route is the latest version of an idea that has been discussed for quite a few years. In most other countries, actuarial education and qualification is much more university-based. Some countries set no professional exams, requiring instead an approved degree; others offer exemptions to graduates of approved programs. Brown offers the following model for North America: candidates who can show that they have studied, at the university level, substantially all the QRS syllabus would be eligible to sit a single comprehensive exam instead of perhaps four exams required for the QRS credential. This could be a considerable advantage to the student who decides on an actuarial career well after entering college. Students who are enrolled in a regular actuarial program would probably not choose this option.

Details of both proposals are still being developed. Expanding Horizons urges its readers to look carefully at both Browns interview in The Actuary, and at the draft of the strategic plan on the SOA Web page. Conversations, the newsletter of the Actuarial Faculty Forum, hopes to run a forum in this summers issue, with arguments pro and con. Your comments and insights are needed.

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Sessions at Spring Meetings

Spring meetings will take place in Dallas (May 30 - June 1) and Toronto (June 20-22). The full program is available on the Web. Here are the sessions being sponsored or cosponsored by the Education & Research Section:

Regime Switching Models: Mary Hardy will offer teaching sessions on May 31, 2-3:30 pm and on June 22, 8:30-10 am.

Using case studies in actuarial education will be a topic at both meetings. In Dallas on May 31, 10:30-noon, Jed Frees and Linden Cole will lead the discussion. In Toronto, Stuart Klugman will direct things on June 21, 10:30-noon.

"All you can eat health care?" is classified as a debate. Krzysztof Ostaszewski will be starting things off, presumably looking for many comments from participants.

This session is scheduled for Friday morning (June 1) in Dallas and Thursday afternoon (June 21) in Toronto.

A panel discussion on "A different look at social security systems" featuring Rob Brown, Krzysztof Ostaszewski, and Leslaw Gajek is on the agenda for Toronto, 4-5:30 pm on June 20. A similar session originally planned for Dallas has been merged with Session #44, "Social Security: the long-term perspective," where Rob and Krzys will be joined by Ronald Gebhartsbauer. This session is scheduled for May 30, 3:30-5 pm.

"Does ERISA bias lead to equity investment?" with Jeremy Gold and Ethan Kra will be presented at Dallas only. In this session, a controversial alternative to ERISA/FASB actuarial cost methods and assumptions is presented as a challenge from the discipline of financial economics.

The Section will host a breakfast at each meeting on Thursday morning. In Dallas, the session will provide a forum for discussing research related issues with Bruce Iverson, SOA Director of Research. In Toronto, Christopher Fievoli will join in a discussion regarding the new exam system.

There are many other sessions that may be of particular interest to Section members, whether concerned with research into such matters as trends in mortality rates, or with discussions of the environment students will be facing in the near future.

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Education & Research Section Council
Summary of minutes for meeting

April 17, 2001, 10:15 am CDT, OHare

Minutes of the October 12, January 9, and February 15 conference calls were approved. The treasurers report was received, with the notation that administrative charges to Sections have increased.

Publications: 1) Expanding Horizons is online. Esther Portnoy is the co-editor responsible for the next issue, which should come out before the Spring meetings. 2) Conversations is edited by Len Asimow. It was suggested that Conversations is probably a better venue for a forum on the "QRS" (Quantitative Risk Specialist) and alternate-route proposals, though these should be described briefly in Expanding Horizons. 3) ARCH co-editors are Arnold Shapiro and Chuck Fuhrer. The next issue, covering the 35th Actuarial Research Conference in Quebec, will be published online. It was suggested that abstracts of all the papers should appear in the years third issue of Expanding Horizons, which will be in both electronic and paper format.

Web liaison David Scollnik reported that the Web page for the E&R Section is among the top 100 visited. There is room for more content, so ideas are welcome.

ARC locations: 2001, Columbus, Ohio; 2002, Waterloo, Ontario; 2003, Ann Arbor, Michigan. There are several candidates for the 2004 conference, including Instituto Tecnologico Autonomo de Mexico. There was considerable discussion of this possibility, and it was decided to poll last years ARC attendees concerning the likelihood of their attending a conference in Mexico City, and to defer the decision until August.

Slate for Section Council elections: Pat Pruitt, Sam Broverman, and Leonard Asimow are completing their terms. The council drew up a tentative slate and will contact those mentioned to ascertain their willingness to run.

There was further discussion regarding the QRS proposal. The Section will not make any official comment on this, but individuals (including academic program contact persons who may not be members) are encouraged to read the "Conversation with the President" in the April Actuary. Dick London volunteered to serve as liaison between the Task Force 2005 and the E&R Section.

Seminars: The possibility of co-sponsoring seminars with other sections has been discussed in the past. Sam Broverman has found the Finance Section more receptive to our proposals than some others and will continue to explore feasibility.

Spring meetings in Dallas and Toronto [See description elsewhere in this newsletter]

Annual Meeting, New Orleans. So far we have lined up four sessions in addition to the Section breakfast:

The New Actuary, an open forum moderated by Dick London and co-sponsored 
with the Computer Science and Actuary of the Future Sections
Automated Underwriting, an interview moderated by David Snell, co-sponsored 
with Computer Science
SOA Research Dollars at Work, an interactive forum with Tom Edwalds and Jack Luff
Beyond the Risk Position Reporting Survey, teaching session with Max Rudolph and 
David Becker, co-sponsored with Financial Reporting and Investment Sections

We will also co-sponsor several sessions organized by other sections:

Why Men Die Younger. Product Development is the main sponsor, but our 
section offered $500 toward cost of the speaker, Barbara Blatt Kalben
Global Retirement Issues and Research, with Pension Section
Web-Based Research Tools, with Computer Science Section

Some sessions are eligible for professional development credit.
The next meeting will be August 8, 7pm EDT at Columbus OH.
(Minutes by Claire Bilodeau summarized by Esther Portnoy)

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Education & Research Section Council
Summary of minutes for meeting

February 15 conference call, 9am CST

Annual meeting: Leonard Asimow is the Section representative on the Annual Program Committee. The primary purpose of this meeting was to develop session ideas and descriptions for the October SOA Annual Meeting. Five sessions (not counting the section breakfast) should be put together; co-sponsorship with other sections is encouraged. Attendance at the five E&R sessions at last Octobers meeting in Chicago ranged from 14 to 60. Possible topics and speakers for the 2001 meeting were discussed.

President Pat Pruitt mentioned that Section representatives are being recruited to assist in the review of material for Course 7. She also called attention to the released draft of the Societys "strategic plan" which can be accessed on the SOA Web site.

Web site for the ARC is up and organization is moving ahead.

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Education & Research Section Council
Summary of minutes for meeting

January 9 conference call, 2pm CST

The treasurer noted that the section has committed $200 to the Mortality at High Ages research project.

Sessions for Spring and Annual meetings were discussed.

35th Actuarial Research Conference at Laval realized a surplus, but final reports are not yet in. Materials for the 36th ARC at Ohio State should be available soon.

Publications: An issue of Expanding Horizons is coming out this week; a blast e-mail will announce its availability on the Web. Leonard Asimow has solicited articles on several actuarial programs for the first electronic version of Conversations . He felt that having a specific focus for the issue made it easier to prepare the issue. The next issue will focus on the exam system and study materials. The aim is to produce one hard copy per year, timed so it can be mailed with Expanding Horizons . The final printed issue of ARCH (2000.2) should be a hefty volume, because there have been quite a few submissions. Starting with 2001.1, the publication will be entirely electronic, and there will no longer be a subscription charge.

Liaisons are sought for the various practice areas. Seminars provide an opportunity for Sections to make money. We should be looking into co-sponsoring seminars with other Sections.

Apparently E&R is currently the only Section whose bylaws provide for participation by non-SOA members, though some other Sections are considering this.

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