By Ian Duncan
For the first time on any stage, anywhere, the heads of research from four major international actuarial organizations addressed actuarial research at the Actuarial Research Conference (ARC) in July! Speakers were Jose Garrido of Concordia University, Montreal (standing in for Dave Dickson who heads research at the CIA), Alice Underwood, vice president for research at the CAS, Sarah Matthieson, head of Research and Thought Leadership at the Institute and Faculty of Actuaries (IFoA) in Edinburgh and Dale Hall, managing director of research from the Society of Actuaries. Interested readers who want to see each speaker’s slides will find these at the ARC website. The session was also videotaped. As moderator of the session, I had asked each of the speakers to address some common topics: funding for research within their organization; the way that research is commissioned, and to describe some past and current research projects.
Left to right: Alice Underwood, Sarah Matthieson, Jose Garrido and Dale Hall (View larger image)
One of the highlights of the session was the funding discussion. Each of the organizations has significantly ramped-up its research and particularly its research funding recently. I kept a running total in my head of the amount of money available for research funding: the total approaches $2.5 million annually (and this excludes the $1 million that the SOA makes available to CAE school research, as well as funding of $100,000–$200,000 coming from SOA sections). Interestingly, the funding of research does seem to be ahead of the demand for funds (or supply of fundable projects), something that all of the speakers intend to address. (The ARC gave them an opportunity to meet with many academic actuaries and exchange ideas about future research.) Some questions addressed how this situation could be reversed: suggestions include better communication of opportunities and making researchers aware that unsolicited proposals are welcome (CAS). From the floor, Mary Hardy pointed out the lack of understanding on the part of the actuarial organizations of the university research process, including difficulties posed by restrictions on data and intellectual property. Stuart Klugman offered suggestions including submitting small applications, not trying to solve too much, remembering that research committees consist of practitioners who do not necessarily have knowledge of the technical methods being proposed for a research project. Finally, the speakers addressed the challenge of making available practical applications for practitioners while at the same time gaining academic credit for researchers.
Different organizations commission and oversee their research in different ways: the Institute and Faculty of Actuaries (IFoA) establishes working parties of member volunteers to conduct their research, in addition to funding PhD students and collaborating with academics., In Canada, the Research Committee has overseen research initiatives since 2005. The SOA has multiple research vehicles including the Research Executive Committee and the CAE, and also the Committee on Knowledge Extension and Research (CKER) and the Actuarial Foundation (as questioners reminded us). The CAS works through a Research Oversight Committee, but also operates a strong university liaison program to 315 schools.
Interestingly, many of the organizations are addressing common issues through their research: mortality and experience studies are an important area for all organizations (excepting obviously, the CAS). Within the CAS, hot topics are solvency modernization, automated vehicles, climate change, emerging risks, predictive modeling and future contingent values outside insurance. Topics of interest to the IFoA are rretirement income and decumulation, long-term care, ageing population issues and changes in future longevity, cyber risk, modelling and the improbability principle, Impact of depleting resources, developments in economics and big data and data science. Hot topics for the SOA are similar: predictive modeling / predictive assessment, longevity risk / mortality improvement, long term care / retiree health care, research in support of public policy and research in support of insurance regulation.
Many thanks to our speakers and the audience for their questions for making this a successful session.
Ian Duncan FSA, FIA, FCIA, MAAA, is adjunct professor of actuarial statistics in the department of statistics & applied probability at the University of California, Santa Barbara in Santa Barbara, Calif. He can be reached at email@example.com.