Description: This research project seeks to develop a broader understanding of the relationship between ownership of insurance and retirement products and the income and wealth gap between races and ethnicities in the United States.

Description: The Society of Actuaries Research Institute is pleased to make available a research report summarizing the findings of two Accelerated Underwriting surveys conducted by Milliman to direct companies and reinsurers. Sponsored by the Marketing & Distribution, Product Development, Reinsurance and Smaller Insurance Company sections, the purpose of the study was to not only determine how practices have changed, but also how they have changed because of COVID-19.

Description: There is value in a framework that allows a smooth transition from a qualitative assessment to a quantitative analysis as entities mature in their understanding of climate risk. In this report, a case study on climate change impact on home prices is used to illustrate a Bayesian network iterative approach to building a model for scenario analysis.

Description: The cyber insurance market looks like it’s growing—rapidly, in fact. However, there’s more to the cyber insurance market than the outward appearance of strong growth. Worldwide aggregate premium’s upward trend may even be cause for alarm. The increase in premium against a flat rate of insured exposure is a key sign that the market could turn from growth to constriction if a solution isn’t found in the near future. If the cyber insurance sector hopes to reach such lofty goals as exceeding $30 billion in global premium by 2028, it’s going to need more capital. Whether directly into the insurance sector or via support from reinsurance and retrocession, fresh capital should help insurers achieve greater market penetration, build a broader foundation for ongoing expansion, and chart a course for long-term sustainable profitable growth. The same sources capital insurers have used since the early days of the market won’t be enough, though. Thankfully, the insurance linked securities (ILS) market seems poised to help, particularly with several promising recent transactions. New sources of capital could bolster the foundation for future cyber re/insurance growth.

Description: This report predicts farm-level crop yield distributions in the absence of farm-level yield data.

Description: This report proposes a methodology to isolate crop yield improvement due to technological change and favorable and unfavorable weather.

Description: Comprehensive insurance covers theft and any vehicle damage not caused by a collision, but rather by natural causes or those of pure happenstance.

Description: Reserving and ratemaking calculations are vital to how insurance companies perform financially. Current-day practices for predicting future loss ratio or pure premiums for reserving and ratemaking rates are not based on low prediction errors—mean squared error (MSE) criterion. This report provides mathematically optimal weights that lead to minimum MSE prediction errors, and the formulas are validated using retro-testing with real-world datasets. In this report, two main theorems are discussed, each addressing prediction of future loss ratio or pure premium and improving upon current practices for how rates and reserves are calculated.

Description: The COVID-19 pandemic and its economic effects have resulted in significant insurance impacts. The General Insurance Research Committee (GIRC) of the SOA put forth a call for essays exploring the potential effects on commercial liability insurance. The committee selected this essay, “Evolving Trends in Commercial Liability Insurance,” submitted by Karl Canty and Varun Balutia of EXL, and awarded them a prize of $1,000. The GIRC congratulates the authors and is happy to publish the winning essay on The Actuary website

Description: This paper proves that rates and premiums are not needed as input in the rating process.