Research Funding Opportunity - Request for Expression of Interest

Society of Actuaries' General Insurance Research Committee

Purpose and overall process

The Society of Actuaries’ (“SOA”) General Insurance Research Committee (“the Committee”) is offering an opportunity for researchers to receive research funding on topics of interest in the general insurance (property and casualty insurance) field.  The research proposals we are seeking are intended to support actuaries in their daily work and to advance knowledge in the general insurance field.  Intended audiences may include non-actuarial stakeholders, such as other finance and risk management professionals in the general insurance industry, policy-makers, regulators and the public.

This document describes the process for submitting an Expression of Interest (“EOI”) and then if invited, a full proposal.  To streamline the amount of effort involved by researchers, the first step in the process is simply to prepare and submit a brief EOI.  The Committee will review the EOI and decide whether there is sufficient interest and funding to warrant receiving a full proposal.  Applicants should not submit full proposals unless invited to do so after the EOI is reviewed.

Who may apply

Both individual researchers and research teams may apply.  EOIs are anticipated to come from:

  1. consulting firms;
  2. individual practitioners (often where the research project is not part of their regular employment);
  3. individual academics, and academic institutions;
  4. professional research organizations and other not-for-profit institutions; and
  5. partnerships of the above.

EOIs from other types of entities will also be considered.  Teams may find it helpful to have both practitioner and academic researchers involved in the EOI; such partnerships are encouraged. Graduate and undergraduate students are not eligible to apply individually, but may be part of a team in one of the above categories.

Selection criteria and themes of interest

Projects are primarily intended to be practical in nature, and of immediate or near-term use and value to applicable audiences.  Theoretical projects may also be considered, depending on the relevance of a topic to current general insurance issues.  A key criterion for the Committee is that the proposed project should have significant potential to benefit actuaries practicing in the general insurance field.

General insurance themes of interest include:

  1. Issues related to automation, in the context of insured risks
  2. Changes to the competitive landscape and business model for insurers
  3. Impact of climate change
  4. Cybersecurity risk
  5. Actuarial techniques

Examples of potential research topics within each of these themes are provided in the attached appendix.  While these examples have been identified by the Committee as topics of potential interest, researchers should not feel constrained to focus exclusively on these topics – the Committee would welcome your input on ways to reshape or refine these topics, as well as suggestions for other topics not listed. 

Illustrative examples of questions the research may address could include the following:

  • What do we expect will change?
  • How can we quantify what is changing?
  • What new areas of practice, or new opportunities for actuaries, are emerging?
  • What new or enhanced techniques could actuaries apply?
  • How should we prepare for anticipated future developments in the general insurance field?

Conditions

The Committee is responsible for deciding on the proposals to be funded; in coming to a decision, input from other knowledgeable individuals may be sought.  For certain proposals (e.g., where additional funding may be required), the Committee may also seek SOA leadership approval.  Once selected for funding, each project will be overseen by a Project Oversight Group, appointed by the Committee; and the SOA's Research Project Manager will provide actuarial staff support (e.g., to coordinate logistics, provide project management oversight, etc.).

The selection of a proposal is conditioned upon and not considered final until a Letter of Agreement is executed by both the SOA and the researcher.

The SOA reserves the right not to award a contract for this research.  Reasons for not awarding a contract could include, but are not limited to, a lack of acceptable proposals or insufficient available funds.  The SOA also reserves the right to redirect a project as is deemed advisable.

The SOA plans to hold the copyright to the research and to publish the results with appropriate credit given to the researcher(s).

The SOA may choose to seek public exposure or media attention for the research.  By submitting a proposal, you agree to cooperate with the SOA in publicizing or promoting the research and responding to media requests.

Expression of interest to propose a research project

The SOA may also choose to market and promote the research to members, candidates and other interested parties.  You agree to perform promotional communication requested by the SOA, which may include, but is not limited to, leading a webcast on the research, presenting the research at a SOA meeting, and/or writing an article on the research for a SOA newsletter.

Interested parties are invited to submit a brief Expression Of Interest (EOI), providing information on:

  • the proposed project title;
  • a description of the research project and how it might be used by practicing general insurance actuaries (either now or in the future);
  • whether a literature review has been undertaken, and its findings;
  • the form of your deliverable, such as a literature review / synopsis, educational / informational article, research paper, software tool, etc.;
  • an order-of-magnitude estimate of the anticipated funding requirements;
  • the ability of the applicant(s) to access data necessary for the research; and
  • the qualifications (including any actuarial designations, and the relevant industry experience) of the applicant(s).

Your rationale in support of a proposed topic could focus on a variety of characteristics such as relevance, uniqueness, immediacy of application by practitioners, availability of data, opportunity to build on other recent research, etc. 

In order to make the EOI process as simple for researchers as possible, and to facilitate the Committee providing quick feedback to researchers on whether to move forward with preparing a full proposal, we request that EOIs be no more than two to three pages in length.  Please submit your EOI to Erika Schulty, ESchulty@soa.org, by noon (Eastern) on September 16, 2019.  We expect that invitations to submit a full proposal will be sent to applicants by September 25, 2019.

Proposals

If you are invited to submit a full proposal, it should include the EOI items listed above, as well as a thorough description of your proposed research, any connections with other research or literature that your research may build upon, CVs for the principal researcher(s), and a budget and timeline.  Proposals will be due by October 25, 2019

Awards

We expect that funding awards will be announced by November 11, 2019, upon completion of proposal reviews.

Questions

We welcome any questions you may have regarding the attached research themes, and this EOI process.  Please reach out to Rob Montgomery, SOA Research Project Manager, at rmontgomery@soa.org

Appendix

Five General Insurance Research Themes of Interest to the Committee: Illustrative Examples of Potential Research Topics

      1. Issues related to automation, in the context of insured risks
      • Quantification of risks associated with autonomous vehicles, e.g.:
        • Impact of weather conditions
        • Adapting vehicle driving style to balance vehicle performance and passenger comfort
        • What factors generate “improvement”; how quickly does artificial intelligence (AI) “learn” from experience, and how quickly does this reduce the probability and severity of collisions
        • Changes in the degree of vehicle automation and implications for the types of insurance needed, the risk to the driver, risks to the manufacturer, and insurance products required as a result
      • Risks associated with AI decision-making errors, e.g.:
        • Product liability arising from poorly designed or inaccurate AI decision-making
        • Risks arising from use of / reliance on robotics in a manufacturing process
        • Medical liability relating to automation, e.g., use of robotics in surgery, use of AI to support physician decision-making
        • Impact of automation in farming, e.g., risk associated with automation of production, or crop storage facilities
        • Home automation, e.g., mechanical systems, appliances, security; and potential related privacy issues

       

      1. Changes to the competitive landscape and business model for insurers
      • Opportunities and challenges relating to FinTech and InsurTech
      • Furthering the understanding of how technological innovations will improve efficiency and effectiveness of the insurance business model (e.g. InsurTech)
      • Considerations and implications relating to potential partnerships with non-insurance startup companies
      • Differences in InsurTech solutions from tradition insurance industry offerings for functions such as delivery of policies, explanation of coverage, submission of claims etc.; evaluation of the current landscape, and assessment of how the traditional insurance business model is anticipated to evolve in the future
      • Who bears the risk in future insurance models
      • Identification of types of insurance coverage that will be needed in the future
      • Recommendations for the approach used by actuaries to price products, where the risk level has changed from historical experience due to technological advances

       

      1. Impact of climate change
      • Changes in the frequency and severity of catastrophic events, and assessment of the resulting risk through climate modelling
      • Forward-looking techniques for assessing and pricing risk in an environment where historical data have limited relevance; how do we assess risk if future outcomes may differ significantly from what was observed in the past
      • Looking forward, what are the climate-related impacts that will drive changes in claims patterns and risk insurability
      • What is the impact of changes in available water supply and increased weather variability for arable land
      • What are the potential impacts of changes in food production on diet / morbidity / longevity as a result of climate change
      • What is the impact of changes in sea levels on flood risk

       

      1. Cybersecurity risk
      • Assessing and pricing risk for cybersecurity coverage
      • Operational risks confronted by insurers in managing their own cyber risk
      • Insurer vulnerability arising from collecting and holding large volumes of personal data
      • Addressing the challenges arising because it is easier to model loss frequency than severity
      • How to quantify capital needs of an insurer under ORSA with respect to its own cyber risk exposure
      • How to quantify insured loses
      • Update of the SOA’s 2016-17 published project on modeling the infection of computers in networks
      • Analysis of police data on reported cyber-crimes to identify potential insights

       

      1. Actuarial techniques
      • Application of predictive analytics for P&C coverages
      • Privacy implications associated with more granular data collection and analysis; this could include implications relating to data collected in the application for insurance, as well as data collected in real time, such as with the voluntary use of apps with auto insurance
      • Use of contingency mathematics in place of, or to augment, analysis of historical claim patterns
      • Multi-dimensional credibility analysis, as compared to traditional credibility analysis based on a single dimension, e.g., assessing credibility of crop insurance claims data using both years of claims data and acreage