GIRO Conference 2023

The Prudential Regulation Authority (PRA), part of the Bank of England, will provide an update on its key regulatory focuses and points of engagement with the general insurance industry.

Daniel Curtis, Rachel Evans, Tom Perkins, Danny Rohrbasser, and Chris Wiltshire, Bank of England

This session is a follow-up to the speakers’ session from the 2022 General Insurance Spring Conference. Here they will cover some of the recent discussion points and conclusions, covering topics such as:

• recent changes in market risk including inflation, interest rates, and correlation between market risk and insurance risk
• external models including economic scenario generators, cyber models, and climate change in natural catastrophe models
• risk metrics, alignment with plan, and one-year risk

Ajay Chhabra, James Toller, and Girinker Aggarwal, Members of the Capital Research Group

In this session, James McIlwaine uses his experience as the lead actuarial developer of the Insurance Development Forum (IDF)/Oasis Risk Explorer to explore how open-access data and spatial sampling can be used to build simple catastrophe models. He will also look at how free-to-use tools can be used to close the protection gap in low and middle-income countries.

He will cover the basic components of catastrophe models and how they’re set up, before introducing what parametric insurance is and why it’s useful. Additionally, he will provide a live demo of the tool and a few of its uses. The Risk Explorer is a free, online, open-source risk modelling platform designed to educate non-expert users in the basic components of catastrophe modelling and parametric insurance. The tool is able to model worldwide tropical cyclone risk as well as a number of other perils.

James McIlwaine, Maximum Information

UK flood insurance is currently based on risk-reflective pricing mechanisms, with highest risk homes subsidised through Flood Re. The current Flood Re solution provides affordable residential flood cover, supported by levies on home insurers.

Flood Re ceases operating in 2039, after which all homes currently subsidised are likely to revert to risk-reflective pricing, becoming unaffordable for many. While risk-reflective pricing and the current Flood Re solution both have their drawbacks, there are other options.

This session examines strengths and weaknesses of 2 insurance pricing extremes – fixed tariff and fully risk-reflective – along with the current Flood Re solution. It also considers how flood insurance pricing operates in different markets around the world, including issues such as the:

• availability, affordability, and take-up of flood insurance
• extent to which the insurance industry can incentivise flood risk mitigation
• public’s perception of flood risk and insurance given the backdrop of climate change and increased frequency of extreme events

Richard Stock, Hymans Robertson, Laura Evans, Flood Re, and Marcus Schofield, Marcuson Consulting

After a period of rate hardening, the London professional and financial lines market has seen a significant deceleration in rate gains, raising the prospect of a soft market in economically uncertain times. This could result in volatility that actuaries will need to quantify and manage.

This presentation will examine the extent to which risks that emerged in the soft market of the previous 15 to 20 years are relevant today and how they can be managed. For example, claims flowing from the 2007 to 2008 financial crisis and subsequent changes in financial regulation, social inflation, the Grenfell Tower fire, Lloyd’s renewed focus on profitability, and the broader impacts and uncertainties of COVID-19.

The presenters will draw on their collective experience of the London FinPro market, which spans over 10 years and previous research on topics such as class actions and climate litigation. They will supplement this with analysis of Lloyd’s data from Xchanging. The presentation will also consider emerging risks and how these might be tackled and will draw on additional insights on the US market gleaned from Milliman’s US actuaries. The presentation will assume some familiarity with Professional and Financial Lines classes of business. It should be of interest to actuaries at all levels and will be relevant to a number of practice areas.

Anandi Shah and Joshua Tomlin, Milliman LLP

The insurance world is growingly chaotic and we never seem to have the time or resources to keep up with it, less make the improvements we know we need. So how can we get out of this mess?

The Sensing and Responding to Chaos and Nonsense Working Party has found ideas from the industrial sector and mathematical chaos theory that explain how to track change and continually improve processes so that work works well and collaboration comes cleanly.

The key is understanding how mathematical chaos works and setting up appropriate chaos monitoring. Plus enabling a special kind of self-organising leadership when hard chaos hits.

In this session the speakers will present a cybernetics model for chaotic change that is a perfect fit for the working party’s 6-year research journey. Ideas will be illustrated through a mixture of principles, examples, and audience participation.

Chris Smerald, Emerald Lake Consulting and Ian Thomas, Aurora Insurance

Market participants would have noticed the significant press coverage of large retrospective (legacy) transactions over the last few years. Transactions are increasingly large (in the billions of reserves), diverse portfolios and viewed within a capital management framework rather than a disposal of non-core liabilities. The capital landscape, economic environment, and insurance market cycle has caused the perfect storm for legacy deals. This talk will cover the macro view of this segment of the market and give a deep dive into a typical transaction.

Mike Cane, Gallagher Re

There is widespread interest in machine learning (ML) and widespread interest and concern in transparency of these techniques and fairness to customers. How can we address these concerns while maximising the value and opportunity of these approaches?

This session will address key questions such as:

• what are the challenges and opportunities to using ML?
• how can we be more transparent in our use of ML?
• how can we create more stable machine learning techniques?
• how can we use ML efficiently as part of our wider pricing process?

This session will include a presentation on new techniques and enhancements and practical guidance on how they can be implemented as part of streamlined pricing processes.

This will be a high-level session rather than a technical one. It should be of interest to actuaries at all levels with an interest in ML including senior actuaries and team leaders interested in maximising use of ML in pricing and analytics.

Neil Chapman and Rachael McNaughton, WTW

An overview from Lloyd’s on current hot topics relevant to the Lloyd’s market.

Mirjam Spies, Catriona Geraghty, Rebecca Soraghan, and Taraash Gautam, Lloyd’s of London

Disaster risk financing (DRF) is a small but rapidly growing space where parametric insurance products are used to provide protection for people in the developing world. Within this arena, START Ready is a new and unique financing mechanism that uses advanced planning so that funding can be rapidly released when needed most.

START Ready is now in its second year of operation, and after much hard work has secured (re)insurance to make more efficient use of the funds available.

DRF has the potential to revolutionise the way we respond to humanitarian crises, but it has many challenges. In this session, the speakers will reflect on the experiences of 2 actuaries supporting START Ready on their journey: one sitting on the governance committee and another supporting START on procuring insurance. The session will:

• provide an overview of the DRF space
• outline real examples of the policies, payouts, and risk pools
• discuss how we can overcome the current lack of data and models
• discuss how the skills from the cat modelling and insurance world can be used to improve DRF
• outline how actuarial skills and analysis are supplemented by those from wider skills and in-country
• experience in supporting well informed decisions

Andrew Jinks, Government Actuary's Department and Rachel Haldane, Start Network

Measuring and understanding the non-financial capital elements of your ESG strategy can be challenging. With the Taskforce on Nature-related Financial Disclosures requirements now in full swing and the increased evidence that climate change and biodiversity go hand in hand, it is more important than ever to start understanding and measuring your company’s biodiversity footprint.

In this talk, the speakers we will go through a case study to illustrate how this can be achieved in practice. Their talk will demonstrate the versatility of the actuarial skillset in the context of a new and evolving cross-functional field.

Raluca Stefan, Grant Thornton; Hamda Masoud, Grant Thornton and Shana Vida Gavron, Endangered Wildlife OU

Davin and Shan are looking to provide an overview of the legacy market and how this has changed over the last few years. In particular they are hoping to raise awareness of how the legacy market can be used as an effective marketplace by senior management and C-suite executives in managing their capital and balance sheets to support their underwriting strategy.

Davin and Shan have extensive experience in the area, having collectively accumulated over 10 years working within retrospective reinsurance.

Davin Patel, Compre Group and Shan Hirani, Gallagher Re

In the fast-evolving landscape of the insurance industry, risk management plays a critical role in safeguarding the stability and success of companies. Traditionally, the risk function has been perceived as conservative and cautious, often seen as a potential barrier to innovation and growth.

But this perception is changing as forward-thinking chief risk officers (CROs) recognise the value of aligning risk management with the broader strategic objectives of their organisations.

This session will explore the transformation of the risk function by delving into the ways in which CROs can proactively support and contribute to the overall company strategy, fostering a culture of risk-aware entrepreneurship rather than risk aversion.

The speakers will highlight successful case studies and best practices from leading insurance companies that have effectively integrated the risk function into their strategic decision-making processes by strengthening the collaboration between risk management and other key functions such as underwriting, marketing, and operations.

Furthermore, the discussion will address the importance of effective communication and transparency in risk reporting to stakeholders. It will also raise awareness of the breadth of expertise and knowledge required by the CRO to meet expectations from the regulators and senior management.

Julien Masselot and Iain Maclugash, Barnett Waddingham

Claims and actuarial are 2 teams that often end up working together but finding a middle ground between the 2 perspectives can be a challenge.

The speakers will unpack the role of working within claims as a claims actuary, answering:

• what differences are there in the way that claims and actuaries think?
• where might claims benefit most from an actuary’s input?
• what can actuaries do to better their understanding of the challenges that claims face with understanding actuarial information?

The speakers will also share their research into using analytics to better understand claims experience, including:

• using an ‘index of case reserving strength’ to quantify and better understand changes in case reserving
• using machine learning with individual claims data to efficiently identify and quantify the impact of specific known claims initiatives, and identify and investigate unexpected changes in claims experience

Charlie Stone and Melissa Tam, LCP

This talk will explore actuarial professionalism and the impacts of the code, using real life implications to provoke discussion. There will also be an update from the IFoA on professional issues.

Richard Chalk and Sonal Shah

The annual update by the Third Party Working Party. This shows trends in frequency and severity of claims for all claim types (AD, TPD, TPI) and tries to put them into context of the wider environment.

Jacqui Draper, GAD and Robert Treen, WTW

By combining insights from a recent extensive industry wide survey of actuaries and underwriters, alongside benchmarking work with numerous insurers on pricing capabilities, Amrit, Tom, and Jamie will be using this session to discuss the current and evolving state of pricing within the London Market.

Key themes being covered within this session will include:

• what are insurers worrying about?
• how well are actuaries and underwriters collaborating?
• what are some of the perceived key barriers to progress in London Market pricing?
• what focus areas and common challenges are insurers facing when undertaking pricing transformation?
• where are some insurers really breaking out from the wider pack with regards to pricing capabilities?

The session will conclude with an interactive Q&A with the speakers where you can dig into more detail on pricing areas brought up through the talk.

Tom Chamberlain, Amrti Santhirasenan and Jamie Wilson, Hyperexponential

Using open-source software to build a capital model is a problem that has not been widely tackled across the industry. The majority of capital models are built in proprietary software and can be relatively ‘black box’ in their nature.

This engaging session will:

• journey through how a panel member with no coding experience built a capital model from scratch, primarily using ChatGPT
• show, flipping the switch, how much insight into capital modelling can be gleaned by simply posing the right questions to ChatGPT
• showcase the results of this experiment in an easy-to-build, user-friendly dashboard to give the audience an understanding of the speakers’ approach
• discuss the potential enhancements and improvements we aim to make in our next steps and what a potentially exciting roadmap could look like

Oliver Grossman and Isabelle Williams, LCP

In its ‘boiling the ocean?’ workshop at GIRO Conference 2022, the Climate Change Reserving Working Party explored how climate change would impact the work of reserving actuaries. The working party surveyed current attitudes and approaches and unpacked key questions for reserving actuaries.

The changes to come will be far-reaching, complex, and increasing over time, reflecting the changing physical environment, society’s transition to a low-carbon global economy, and developments in climate litigation.

The working party will share output from its 3 main workstreams, which are:

• climate litigation case studies: landmark legal cases expected to shape the future litigation and liability landscape
• heat map tool: how to identify and assess exposures and vulnerabilities within your reserving (and underwriting) portfolios: proof-of-concept applications to property and directors and officers classes
• communications: how actuaries might describe uncertainty in year-end reserving exercises and statements of actuarial opinion

The profile and urgency of the challenge for reserving actuaries has increased since last year, with continuing wildfires, record-breaking heatwaves, fast-moving developments in climate litigation, and the high-profile withdrawal of reinsurance capacity in major peril-regions. Also, the new TAS 100 includes an explicit reference to climate change.

This workshop is aimed at general insurance reserving practitioners and will not assume an in-depth knowledge of climate change.

James Orr, PRA - Bank of England; Alex Marcuson, Marcuson Consulting and Josie Durley, Nephila

An introduction to some different ethical frameworks, using case studies and discussion, to think about why it can happen that 2 people can come up with contradictory solutions to a problem while both (correctly) claiming they are acting ethically. This will then be applied to various work situations.

Richard Winter

The speakers will summarise the outcome of their second annual inflation survey of UK P&C actuaries, comparing actual versus expected CPI inflation for 2023, highlighting key changes since last year’s survey in relation to participants’ views of inflation expectations and uncertainty in the short and medium term. They will also present the first part of their research: namely techniques for estimation of historical claims’ inflation.

Cian Creedon, MS Amlin; Erin Bargate, Hiscox; Shane Lenney, SCOR; Marcus Schofield, Marcuson Consulting

Actuaries are using more software than ever before and with the rise of InsurTech, the role of an actuary is expanding to include more development work. This talk will go through history, principles, and guidance on how actuaries should best approach building systems to last, instead of ones that turn into a future burden.

Thomas Hamilton, L Data. T Data

The presentation will identify the 10 most serious geopolitical risks facing the world right now and the consequences should any of them come to pass.

Dr Timothy Less, Centre for Geopolitics at the University of Cambridge

The IFoA Actuarial Data Science Working Party would like to share its findings on new approaches to modelling in non-life insurance. It aims to help update your technical toolkit by showcasing new predictive models developed by actuaries, inspired by machine learning techniques, and dispel myths about the lack of model explainability.

The goal of this presentation is to perform a series of modelling exercises with a data science perspective, including the step of model interpretability using eXplainable AI (XAI) methods. By comparing the new and standard models, the speakers will assess the value proposition of machine learning for actuaries and address the benefits and challenges associated with adopting these new techniques.

The session will cover various tree-based models and different neural network architectures.

The content of the talk is targeted towards pricing and reserving actuaries, predictive modellers, actuarial data scientists, and those seeking to gain more knowledge about this field.

Karol Gawlowski, Allianz Commercial

This presentation will outline some of the key risks and opportunities for insurers arising from the rapid development of AI technology. It covers both the changes in insurance risk as well as the operational risk associated with adoption of AI technology by insurers. The format will be a presentation with some live audience polling on key issues.

The speakers intend to cover:

• where are we on the AI journey and what are the general risks that we will encounter along the way?
• what are the key areas where insurers could deploy AI and what additional risks do these lead to?
• an analysis of the pros and cons of developing AI models internally versus use of ‘vendor models’ like Chat-GPT
• a framework for helping insurers manage AI risks

The presentation will be accessible to all with general insurance knowledge and an interest in emerging risks and AI. It is aimed at providing a general overview of a fast-evolving area of focus.

Edward Harrison, LCP and Visesh Gosrani, Cowbell Cyber

GAD is currently carrying out research for the FRC into the use of machine learning and artificial intelligence in actuarial work. This research will be completed ahead of the GIRO Conference 2023 and this session is intended to talk through the key findings, particularly in respect of general insurance actuarial work.

The speakers will provide the perspective of both the research team at GAD and the FRC as commissioners. They will also cover the implications of the findings and relevant developments since the research was completed.

Actuaries working with AI or ML as practitioners, sponsors, or users of output should find this relevant and interesting.

Attendees should get an understanding of the research findings on how AI and ML is being used by actuaries, including:

• how teams are structured
• how actuaries work with non-actuaries
• how work is quality assured
• how ethical risks are managed
• how the different techniques are being used

Sam Davies, GAD and Matthew Myring-McCullagh, Financial Reporting Council

This session will delve into the realm of AI and its impact on the insurance market. We begin by demystifying the differences between machine learning, AI, and generative AI, providing attendees with a clear understanding of these terms and their applications.

Our speakers will then cover in further detail:

• key use cases of how AI has and is being used in the insurance market
• rise of generative AI and the potential benefits and risks
• AI as a disruptor in the insurance industry or simply a useful tool to augment the existing insurance landscape

Through the session the speakers will explore how this transformative technology can be leveraged in attendees’ own organisations, including practical examples of how AI can streamline processes, improve decision-making, enhance risk analysis, and drive innovation within the insurance industry.

The session will conclude with an engaging Q&A session where the attendees will have a chance to get involved in the discussion.

Tom Chamberlain and Amrit Santhirasenan, Hyperexponential

In this presentation the speakers provide a short introduction to large language models followed by 6 case studies of their use in different elements of actuarial work and insurance. They will conclude with a discussion of the risks and evolving regulatory landscape for large language models and AI.

The presentation includes demonstrations of large language models for coding, automation and transcription of excel models into code, generation of documentation, and topic modelling.

The speakers have presented this topic at CILA and the general insurance conference of the Society of Actuaries, Ireland.

The content is suitable for all audiences including:

• people working in AI who want to understand the insurance applications
• actuaries and insurance professionals who want to understand the likely impact of AI on their work and the opportunities this presents

Matthew Edwards, Mani Heer and Chris Halliday, WTW

Depending on who you listen to, AI is either going to destroy the world or solve all the world’s problems. Either way, it will revolutionise everything, right? But what if it doesn’t? What if it’s not good, or bad. What if it’s just… fine?

AI joins the long list of innovations, driven by advances in technology and economies of scale, whose names hide the underlying premise.

This presentation will explore what AI could be called and how, if you frame it in the right way, you can see it for what it is: a tool for people.

Fearghas MacGregor, Barnett Waddingham

The IFoA Actuarial Data Science Working Party would like to share its findings on new approaches to modelling in non-life insurance. It aims to help update your technical toolkit by showcasing new predictive models developed by actuaries, inspired by machine learning techniques, and dispel myths about the lack of model explainability.

The goal of this presentation is to perform a series of modelling exercises with a data science perspective, including the step of model interpretability using eXplainable AI (XAI) methods. By comparing the new and standard models, the speakers will assess the value proposition of machine learning for actuaries and address the benefits and challenges associated with adopting these new techniques.

The session will cover various tree-based models and different neural network architectures.

The content of the talk is targeted towards pricing and reserving actuaries, predictive modellers, actuarial data scientists, and those seeking to gain more knowledge about this field.

Karol Gawlowski, Allianz Commercial

This presentation will outline some of the key risks and opportunities for insurers arising from the rapid development of AI technology. It covers both the changes in insurance risk as well as the operational risk associated with adoption of AI technology by insurers. The format will be a presentation with some live audience polling on key issues.

The speakers intend to cover:

• where are we on the AI journey and what are the general risks that we will encounter along the way?
• what are the key areas where insurers could deploy AI and what additional risks do these lead to?
• an analysis of the pros and cons of developing AI models internally versus use of ‘vendor models’ like Chat-GPT
• a framework for helping insurers manage AI risks

The presentation will be accessible to all with general insurance knowledge and an interest in emerging risks and AI. It is aimed at providing a general overview of a fast-evolving area of focus.

Edward Harrison, LCP and Visesh Gosrani, Cowbell Cyber

GAD is currently carrying out research for the FRC into the use of machine learning and artificial intelligence in actuarial work. This research will be completed ahead of the GIRO Conference 2023 and this session is intended to talk through the key findings, particularly in respect of general insurance actuarial work.

The speakers will provide the perspective of both the research team at GAD and the FRC as commissioners. They will also cover the implications of the findings and relevant developments since the research was completed.

Actuaries working with AI or ML as practitioners, sponsors, or users of output should find this relevant and interesting.

Attendees should get an understanding of the research findings on how AI and ML is being used by actuaries, including:

• how teams are structured
• how actuaries work with non-actuaries
• how work is quality assured
• how ethical risks are managed
• how the different techniques are being used

Sam Davies, GAD and Matthew Myring-McCullagh, Financial Reporting Council

This session will delve into the realm of AI and its impact on the insurance market. We begin by demystifying the differences between machine learning, AI, and generative AI, providing attendees with a clear understanding of these terms and their applications.

Our speakers will then cover in further detail:

• key use cases of how AI has and is being used in the insurance market
• rise of generative AI and the potential benefits and risks
• AI as a disruptor in the insurance industry or simply a useful tool to augment the existing insurance landscape

Through the session the speakers will explore how this transformative technology can be leveraged in attendees’ own organisations, including practical examples of how AI can streamline processes, improve decision-making, enhance risk analysis, and drive innovation within the insurance industry.

The session will conclude with an engaging Q&A session where the attendees will have a chance to get involved in the discussion.

Tom Chamberlain, Amrit Santhirasenan, and Jamie Wilson, Hyperexponential;  Alice Boreman, EY

In this presentation the speakers provide a short introduction to large language models followed by 6 case studies of their use in different elements of actuarial work and insurance. They will conclude with a discussion of the risks and evolving regulatory landscape for large language models and AI.

The presentation includes demonstrations of large language models for coding, automation and transcription of excel models into code, generation of documentation, and topic modelling.

The speakers have presented this topic at CILA and the general insurance conference of the Society of Actuaries, Ireland.

The content is suitable for all audiences including:

• people working in AI who want to understand the insurance applications
• actuaries and insurance professionals who want to understand the likely impact of AI on their work and the opportunities this presents

Matthew Edwards, Mani Heer and Chris Halliday, WTW

Depending on who you listen to, AI is either going to destroy the world or solve all the world’s problems. Either way, it will revolutionise everything, right? But what if it doesn’t? What if it’s not good, or bad. What if it’s just… fine?

AI joins the long list of innovations, driven by advances in technology and economies of scale, whose names hide the underlying premise.

This presentation will explore what AI could be called and how, if you frame it in the right way, you can see it for what it is: a tool for people.

Fearghas MacGregor, Barnett Waddingham

Solvency II was implemented at the start of 2016 following 15 years of thorough consultation. However, practical issues with its application came to light. In addition to this, the Treasury Select Committee carried out an inquiry on the possible modifications to Solvency II post Brexit. The working party’s initial scope focused on carrying out a practical review of the Solvency II regime to help guide these modifications.

On 17 November 2022, the government announced its final proposals and the reformed Solvency II regime will be known as ‘Solvency UK’.

The renewed working party scope was to gain a clarity on the changes and possible market impact of moving from Solvency II to ‘Solvency UK’ on the non-life sector.

This talk will present the working party’s findings and additional points to consider in transitioning to Solvency UK

Amrita Pattni, Guy Carpenter

The new Ogden discount rate is imminent. Large claims inflation is still hotly debated, and large loss now represents around 25% of claims cost for UK motor insurers – in reality, the most volatile 25% of claims cost.

The PPO Working Party will host a presentation and discussion of these topics, including:

• PPOs’ relationship with the new Ogden rate
• the working party’s views on the responses to 2 questions directly relating to PPOs in the MOJ’s recent call for evidence on the Personal Injury Discount Rate
• analysis of the latest annual survey of hours and earnings (ASHE) figures, which is a headline number for many insurers’ motor large loss inflation assumption
• the working party’s latest analysis on the quantitative trends of PPOs as at 2022 year end, including PPO propensity (Previous content can be found on the working party’s web page at: Periodical Payment Orders)

Justin Thomas, Acorn Insurance

As expert modellers, pricing actuaries over the last few years have been keen to upskill in various coding languages and study alternative modelling algorithms for predicting claims experience, especially in personal lines insurance.

This is all well and good in an analytical, research, and development environment. But what if you want to implement all this knowledge into live pricing?

The speakers in this session will showcase how actuaries and data scientists can collaborate to produce market leading pricing algorithms. They will celebrate diversity in pricing teams, leveraging their own experiences (from actuaries in the business and data scientists), elements of research around data-driven culture, and parts of the Actuaries’ Code.

Topics discussed will range from the tech stack to team structure and everything else in-between.

Kristina Hegarty, Tom Beckett, Paul Shannon, Hastings Direct

Effective enterprise risk management should ensure ongoing review and improvements to existing risk frameworks by creating an emerging risk sub-framework to account for emerging risk identification and to identify, assess, quantify, represent, and communicate these types of risks and their associated uncertainties so that firms can minimise the strategic shocks associated with emergencies that arise from these types of risks.

This webinar provides key insights into key global geopolitical issues and explores how risk functions can contribute to more effective decision-making in their firms on this key issue.

Lawrence Habahbeh, HedgeGenomics

Every year Hymans Robertson invites a wide selection of insurers to complete its in-depth survey about climate change. The areas covered include:

• governance
• risk management
• scenario analysis
• disclosures
• metrics and tools

This year Hymans Robertson would like to share what it knows about the market with you.

In this session the speakers will discuss the above climate change considerations and look to provide solutions to these considerations. They will also look at what you think about biodiversity, another key developing area, and your plans on reporting in line with Taskforce on Nature-related Financial Disclosures guidance, which is to be published in September 2023.

This will be a high-level interactive live session rather than a technical one. It should be of interest to actuaries of all levels with an interest in better communication including senior actuaries and team leaders who communicate with boards regularly.

Natanya Taylor, Siddhant Chopra, and Kate Fry, Hymans Robertson

A beginners guide to risk management across an agile transformation from someone who should know better! There once was a chief actuary of a Lloyd’s syndicate who spent her career in waterfall transformation. Then she decided to adopt the risk function of a personal lines insurer amidst an enterprise wide agile transformation.

Will she succeed? Will the programme ever finish? How will she manage risk with no plans? How do you secure outcomes with a moving scope? How can you impose order and discipline without governance and meetings?

This session is designed for people considering or delivering change in an ‘agile’ environment. After 18 months of working on an agile change programme replacing policy, underwriting, claims, and data systems, Helen Cooper will explore what she has learned and how the approach differed to a traditional waterfall mindset.

Helen Cooper, esure

This talk aims to introduce capital modellers to simple machine learning techniques to aid their understanding of their outputs at the 1in200. Many modellers will be familiar with these techniques already but may not have seen them applied in this way before.

This talk assumes only very basic knowledge of capital modelling and no prior knowledge of machine learning.

Howard Dale and Patrick Shammas, Dale Consulting

This talk will cover the drivers for the 2022 losses including factors affecting claim cost and pricing, many of which were outside the insurers control. It will examine the challenges faced by the insurers from all angles including regulation, inflation, and the impact Covid had on experience and insurance strategy.

The speakers will look at how those different factors combined to make it very difficult to keep on top of the profitability and predict future outcomes. It will cover the ongoing challenges and most importantly what we, as actuaries, should do differently based on what we’ve learned.

This will be a good talk for anyone in or new to motor insurance as it will touch on the key challenges facing motor insurance all together in one talk, including issues discussed separately in detail in other talks, such as Ogden and the Third Party Working Party.

Susan Dreksler and Janet Baker, KPMG

This roundtable aims to have an open discussion with attendees around:

• what does the ‘S’ in social mean?
• what should insurers be considering: is the focus on minimising the bad or maximising the good, and
• how does this interact with other considerations?
• should insurance that brings additional positive benefits to society be treated differently, and what do these markets look like now?
• how should actuaries be involved?

Laura Curtis, Ki

The PRA’s thematic review on underwriting profit that allowed for internal models (IMs) was initiated following the Bank of England’s model drift analysis in 2022. Firms with optimistic loss and combined ratios within business plans are at risk of underestimation of SCR if input into the IM is without appropriate adjustments.

This talk will outline:

• potential impact of optimistic business planning assumptions on SCR for IM firms: a case study of impact on SCR from loss ratio stress testing based on IMO data
• how firms derive expected loss ratios or combined ratios for the premium risk component of IMs: what are the adjustments and what are examples of good and bad practices?
• whether there is adequate validation for this key assumption

The session will be an interactive live presentation. The speakers will discuss their investigation into firms’ business planning processes, with a focus on the validation and challenges on the expected underwriting profits allowed for in IMs.

The talk should be of interest to actuaries at all levels, in particular actuaries at firms that either have an internal model or are considering implementing an internal model. The talk would be useful for non-actuarial staff working within underwriting or risk functions.

Jenny Xu, Ryan Li and Gregory Gavin, Bank of England

In this workshop, members of the Towards the Optimal Reserving Process Working Party explore the latest research on Supervisory Statement 1/23 on model risk management principles and its implications for ground-up reserve process design and migrations and transformations.

The 5 model validation areas and principles of: 1) model identification; 2) governance; 3) model development, implementation, and use; 4) independent model validation, and 5) model risk mitigation initially proposed for bank capital models are explored in depth.

The bridge is made to reserve process risk looking at (reserve) model design, governance, and validation.

This seminal supervisor statement has key learnings for reserving actuaries which will help improve reserving processes in a world of endless wrangling over model migration, data source systems, data science, and ground-up process design. From initial data feeds to post model adjustment, the implications of Supervisory Statement 1/23 extension from bank processes to reserving process risk validation and review are explored in detail with lessons learned for a world stressed by geopolitical tension, ongoing inflation risk, and where reserving processes (and broader finance transformations) are facing the implications of generative AI. The workshop will not assume prior knowledge.

William Diffey, Lloyds; Arun Vijay, BDO; Param Dharamshi, KPMG; Malcolm Cleugh, RSA

This workshop will explore the different methods that can be used to value the equity of a non-life insurer for the purposes of determining a target share price.

These methods are being typically adopted by sell-side equity analysts working within equity research houses for the purposes of buy, hold, and sell recommendations.

Topics include:

• simple multi-year models to project the financials (P&L, balance sheet, cashflow) of a company
• simple multi-year models to project the required capital and solvency ratios
• advantages and disadvantages of each of the equity valuation methods
• explanation of how the above are interrelated
• discussion of top-down versus ground-up models and how to reconcile the 2
• how company financials, solvency, and share price projections respond to multi-year scenarios

Richard Shaw, Consultant

Building relationships and communicating effectively is a skill like any other. It can be learned, developed, and fine-tuned. In this session, we will highlight and explore simple adjustments that will allow you to be more effective and more productive in your meetings, conversations, and professional relationships.

Sarah Hanson, Interactifs UK Limited

In the ever-expanding world of data science, machine learning, and AI, actuaries have access to unprecedented modelling power and opportunities for efficiency in their work.

But could actuaries be responsible for the next big data privacy scandal? Is following the letter of the law enough when it comes to AI? Just because you can, does it mean you should?

Using real examples and case studies, the Data Science Community – Professionalism, Regulation and Ethics Working Party explores the ethical use of these tools and talks through some of the regulatory and professional obligations actuaries should consider before embracing them.

Murray Lidgitt, Hymans Robertson; Hazel Davis, Sabre

Ben Kemp, Chief Executive Officer (Interim)

The Ogden discount rate is crucial for insurers and reinsurers for pricing and reserving for UK bodily injury claims. This year, the Ministry of Justice issued a call for evidence on the possibility of introducing a dual or multiple rate. This coupled with the deadline for the new rate to be announced in 2024 is causing many CEOs, CFOs, and chief actuaries to query what the rate should be now and for year-end, and whether it will be a single or multiple rate.

The working party will share:

• insights on the call for evidence
• expectations for the future direction of the discount rate including scenario estimates
• results of its comprehensive survey of the industry

Andrew Corner, PwC; Mohammad Khan, PwC; Grant Mitchell, Soteria Insurance

This session will provide a wide-ranging and thought-provoking discussion of the social impact of the insurance industry. These include the:

• positive contributions already delivered
• areas where we potentially fall short
• opportunities to make a greater positive impact

Steven Fisher, Rachel O’Connell, Mathilde Haran, Jamie Brennan, Richard Winter, Insurance as a Force for Social Good Working Party

Deep neural networks have become an important tool for use in actuarial tasks. This is due to the significant gains in accuracy provided by these techniques compared to traditional methods and the close connection of these models to the generalised linear models (GLMs) used in industry.

In this work Old Mutual Insure:

• presents a novel method for enforcing constraints within deep neural network models
• shows how these models can be trained
• provides example applications using real-world datasets

Old Mutual Insure calls its proposed method ICEnet to emphasise the close link of its proposal to the individual conditional expectation (ICE) model interpretability technique.

Ronald Richman, Old Mutual Insure

This presentation will reveal a holistic approach to risk and capital management of non-life insurance balance sheets. It explores the synergy between underwriting and investments, and how modern techniques can optimise the balance sheet, improving financial stability and maximising return on equity.

Specific topics considered include:

• setting up an analytical framework for the full insurance balance sheet providing a holistic view of accounting profitability, risk, and capital
• integrating risk and capital metrics across non-life insurance and investments
• optimisation techniques to improve risk and capital metrics for the balance sheet and maximise return on equity from both underwriting and investments

Gareth Haslip, JP Morgan Asset Management

This presentation will explore:

• the history, motivation, and mechanics of catastrophe bonds
• why many catastrophe bond issuers choose Bermuda to domicile
• current state of the market and growth prospects
• where actuaries fit into this process

The speakers will then deep dive into specific issues in the market including:

• dented investor confidence following a sequence of bad hurricane years
• challenges of securitising casualty and cyber business – and how these efforts are currently developing
• the ‘Florida challenge’: the unique challenges presented by the legislative environment of the Florida insurance market

Paul McVeigh and Alistair Lynch, Deloitte

Flood events have the potential to cause significant damage to individuals, businesses, and the economy regardless of their nature and geography. However, over the course of time, there have been some particularly devastating global floods.

Through these major catastrophes, invaluable lessons have been learned that have shaped the insurance industry and regulatory environment worldwide.

This session is split into 3 parts. Section 1 examines case studies of major flood events, as well as the key findings and learning outcomes.

Section 2 investigates challenges in actuarial applications, including:

• challenges of modelling different flood events, including issues related to type of flood, data availability and quality, flood forecasting, and vendor catastrophe models
• challenges in pricing and reserving, including wider topics such as the dynamism of flood events (for instance, as a result of climate change)

Section 3 explores emerging and evolving risks, including:

• a case study on Australian floods, noting the recently created cyclone pool
• the impact of climate change
• how technology may revolutionise the flood market in future, for instance potential AI applications, and what this may mean for the role of the future actuary

Laura Evans, Flood Re and Kemi Bello

In this panel discussion are 4 experienced female actuaries in a range of senior roles who have embraced the challenge of raising a family as well as pursuing an ambitious career.

Chaired by a young actuary, the panel will be challenged to share their experiences, how they balanced work, home, and life commitments, what they have learned along the way, and what they would do differently.

They will also be asked to answer the ultimate question: can we have it all?

The panel will be chaired by Juliana Villegas Suarez, a recently qualified actuary, curious to understand the challenges of navigating an actuarial career if one chooses to combine it with raising a family or pursuing an activity they are passionate about.

The objective of the session is to:

• help individuals who are considering or are already in the midst of progressing a career while balancing a family life or other commitment
• help individuals to understand the choices they have, and once made, how one can achieve a reasonable set of goals
• be practical and set out the challenges and the inevitable compromises that one has to make
• show how enthusiasm for one’s job and one’s other commitments can, with a bit of planning and common sense, result in great success, happiness, and wellbeing for everyone

Juliana Villegas Suarez and Susan Dreksler, KPMG, Aoife Martin, Partner Re, Helen Cooper, Esure, and Kalpana Shah, IFoA President

Marcus will explore the maths behind the games we love to play, and why we love to play them. Spanning millennia, countries, and cultures, he will explain how maths and games have been integral to human psychology and culture. And he’ll also offer a few mathematical strategies to give you an edge when you next play.

Dr Marcus du Sautoy