By Anthony Cappelletti
Welcome to General Insurance Insights, the SOA’s biannual newsletter for those with an interest in general insurance (aka property and casualty insurance). Within this newsletter, we include a couple of articles on current topics for general insurance actuaries. The first article is by Michael McKenney, Actuarial Supervisor for the Pennsylvania Insurance Department, Property & Casualty Bureau. McKenney’s article, “What is Unfair Discrimination in General Insurance Rating? A Regulator’s Perspective,” provides the Pennsylvania Insurance Department perspective on what may be considered unfair discrimination in rating. The article ties this in with the modeling of big data and the use of price optimization. The second article is a Q&A I had with Alex Krutov, MAAA, ASA, FCAS, CERA, president of Navigation Advisors LLC. Krutov is a recognized expert on cyber risk, cyber insurance, catastrophe modeling, and advanced tools for risk analysis. I have had the pleasure of working with him on a couple of cyber risk webinars. I thought I would take the opportunity to ask him a few questions I had on cyber risk and share his responses with the readers of General Insurance Insights.
Also in this issue, there is an article by Stuart Klugman, FSA, CERA, Ph.D., senior staff fellow at the SOA, outlining the implications of the upcoming changes to the ASA curriculum on the General Insurance track to fellowship. In addition to this, there is an update from the SOA’s Research Department regarding issues of interest to general insurance actuaries and an update of general insurance professional development opportunities.
For those who were at the 2016 SOA Annual Meeting & Exhibit in Las Vegas, I hope you had a chance to attend some of the GI-relevant sessions. There were four GI-specific sessions and six sessions with content relevant to GI (not including general sessions applicable to actuaries in all practice areas). The sessions included:
- SOA-GI Breakfast
- Actuarial Climate Research Update/Practical Applications
- Current Trends in General Insurance Loss Costs
- Big Data and Price Optimization in General Insurance
- Operational Risk—A Gap in Approach
- The Swiss Standard Model for Captive Reinsurers—Insights & Features
- Data and Model—Actuary Should be Expert of Both
- Capital Steering for Shareholder Value
- Professionalism Aspects of Model Efficiency
- Beyond Generalized Linear Models, What are Possible Models Actuaries Can Choose?
I attended the sessions and found them all informative and interesting. My personal favorites from these sessions included:
- Janet Duncan’s presentation at the SOA-GI Breakfast. Janet Duncan, FSA, MAAA, FCAS, an actuarial lecturer at the University of California, Santa Barbara, presented the results from a study completed by her students on the increased use of hand-held devices while driving and automobile accident frequency. The results were interesting and thought provoking.
- The panel discussion at the “Big Data and Price Optimization in General Insurance” session. The panel was moderated by Ann Weber, director, Government Affairs at the SOA and included four panelists, each with a unique perspective on the topic. Amy Bach, executive director at United Policyholders provided a policyholder perspective; Mary Jane Wilson-Bilik, partner at Sutherland Asbill & Brennan LLP provided a legal perspective; Mark Smith, assistant vice president, Government Relations at ISO provided an industry perspective; and Angela Nelson, director at the Missouri Department of Insurance provided a regulatory perspective. The discussion was enlightening, providing actuaries with thoughts on big data beyond the mechanics of modeling. The only issue was that sessions are limited to 75 minutes; this panel could have kept us engaged for at least twice that amount of time.
Planning for potential GI sessions for the 2017 SOA Annual Meeting & Exhibit in Boston will begin soon. If you have any ideas for a GI session, please submit it to the SOA through the formal submission process or you can email your idea to me informally. Also, the ERM Conference is scheduled for April 20–21, 2017 at the Sheraton New Orleans in New Orleans. The ERM Conference is sure to include a significant amount of GI relevant content.
The SOA’s GI community discussion forum at engage.soa.org began earlier this year. Some interesting topics have come up (e.g., cyber risk, UBI, autonomous vehicles, climate change, big data). Please be sure to check it out and add to the discussion. Note that the GI community discussion forum is private; only those members listing GI as their primary practice area have been invited to join. If you would like to join the General Insurance Community but did not receive an invitation, please send an email with your name, address, employer and email address to firstname.lastname@example.org.
Our goals with General Insurance Insights are to keep readers informed on topics of interest to general insurance actuaries and to develop the general insurance actuarial community within the SOA. We welcome your feedback and ideas to help us achieve these goals. If you have questions, feedback, or ideas regarding General Insurance Insights, feel free to contact me.
I would also like to take this opportunity to inform our readers that we are always looking for volunteers in general insurance at the SOA. Whether it be for exams, research, or writing an article for the newsletter, let us know if you are interested.
Anthony Cappelletti, FSA, FCIA, FCAS, is a staff fellow for the SOA. He can be contacted at email@example.com.