General insurance: research working parties

The working party will investigate the transformative potential of blockchain technology in the insurance industry and the role that actuaries can play in that regard. This will include the evolving impact of these technological advancements on actuaries' roles within the rapidly expanding field of Decentralized Finance (DeFi).

By comparing these emerging responsibilities with traditional actuarial roles, the group aims to offer strategic recommendations that position actuaries at the forefront of this dynamic sector. Our focus will be on equipping actuaries with the insights and tools necessary to lead and innovate in the realm of DeFi, ensuring that the profession remains adaptable and forward-thinking in a rapidly changing financial landscape.

About

Chair: Aly Soliman
Established: 2024

The aim of the working party is to support reserving actuaries in the following ways:

• promoting research relating to reserving for climate change
• providing a framework within which reserving actuaries can discharge their professional responsibilities in respect of climate change and participate meaningfully in conversations on this topic
• engaging and informing those who wish to acquire an understanding of how climate change affects reserving.

About

Chair: Alex Marcuson
Established: 2022

This working party provides a forum for GI actuaries to discuss local and international GI issues impacting members in the region, as well as the opportunity to further research in specific regional issues.

There is an incredible amount of change in the international arena that will serve to keep GI actuaries around the world busy.

The effect of changes brought by the rapid development of emerging insurance markets or data analytics for example, are felt locally in our day-to-day work, but in many cases the ‘actuarial issue’ is commonly shared across international borders.

In recognition of the common issues impacting GI actuaries across borders, the IFoA has launched a GI international working party in the Asia region.

About

Chair: Sie Liang Lau
Established: 2016

This working party functions as a source of knowledge and expertise within the UK actuarial profession on matters relating to flood, with a particular focus on the UK.

Key objectives

Its key objectives are to:

• provide insight on potential issues and challenges facing the UK insurance market in relation to the ongoing availability of affordable home and commercial property insurance in the context of flood and other secondary weather perils, in particular relating to future climate and regulatory change
• support and enable wider understanding amongst the industry, government, and the public of key issues relating to the ongoing availability of affordable home and commercial property insurance in the UK, to help influence related activity, key decisions, and developments
• monitor and report on UK market developments in relation to the availability and affordability of flood insurance
• develop thinking and potential solutions (in conjunction with other relevant organisations and groups) to help support the above objectives (including resilience and planning), drawing on experience, research, and activity, in the UK and elsewhere around the world
• produce reference material for UK actuaries when considering flood and other secondary weather perils for use in pricing, reserving, and capital modelling
• present to GIRO and develop articles to share our insights, coordinating with other relevant working parties and industry groups where possible
• consider alternatives to risk reflective pricing, including through review of other solutions around the world
• remain vigilant of potential market changes that impact other weather perils leading to similar issues faced to flood

About

Chair: Laura Evans
Established: 2014

Best practice in assessing and responding to claims’ inflation during times of inflationary turbulence – either in the general economy or in a single line of business.

The anticipated output is a detailed research paper, with numerous worked ‘examples’ with 2+ presentations/seminars along the way.

About

Chair: Cian Creedon
Established: 2023

This working party has come out of the group’s ICAT (COVID-19 Action Taskforce) workstream work which was looking at the longer term impacts on (re)insurers and the wider market from the changing risk profile of policyholders. The ICAT workstream dug deep into the key personal and commercial lines of business affected by COVID-19 from a pricing perspective, and in addition provide a general framework of considerations for GI pricing actuaries when looking at COVID-19 exposures.

This working party will build on this covering personal lines and commercial lines digging into certain classes of business and looking at impact of outcomes from regulatory changes for pricing e.g. FCA pricing review.

About

Chair: Amerjit Grewal
Established: 2021

This working party explores how ‘Story Telling’ might improve communication of potential future developments and adverse outcomes resulting in better decision-making under uncertainty.

The objectives of The Good Actuarial Report Working Party are to:

• explore current practices and shortcomings in writing actuarial reserving reports
• ​explore how ‘story telling’ might provide pointers to writing a better actuarial report and to transferring knowledge, experience, and wisdom
• consider the relevance and application of TASs in actuarial reports
• investigate current practices in writing actuarial reserving reports and the perceived value that these deliver
• develop a drafting guide and recommendations to support actuaries in writing a good actuarial report
• develop criteria and a framework for evaluating the utility/usefulness of actuarial reports.

About

Chair: Chris Smerald
Established: 2013

This working party (previously IFRS 4 Phase II) examines the implications of the accounting changes on general insurers and, in particular, on the work carried out by actuaries.

The IFRS 17 for General Insurance Working Party's objectives are to:

• raise awareness of what the changes to the IFRS accounting requirements will mean for actuarial practice, particularly for those working in General Insurance
• encourage debate on how the requirements can be implemented effectively and pragmatically
• produce materials to help other actuaries understand the requirements and how they might be implemented.

About

Chair: Alice Boreman
Established: 2015

The Insurance as a Force of Social Good Working Party aims to explore an aspect of what it means for actuaries to work in the public interest in the insurance sector.

Key objectives

Although it is recognised that insurance is a commercial enterprise, the origins of insurance companies are often mutual organisations sharing risk. Topics may include:

• How insurance supports the economy
• How insurance companies see their role in corporate social responsibility
• How insurance underwriting/pricing can influence wider behaviours
• Current challenges may include
• Ethical investment/environmentally responsible investment
• Ensuring universal access to insurance
  • Insuring the uninsurable
  • Affordable insurance
  • Micro insurance

About

Chair: Steven Fisher
Established: 2017

Objectives

To identify the practical use cases for new technology in general insurance, and the opportunities for actuarial involvement in developing and implementing them. To include consideration of:

• AI and Machine Learning
• Robotic Process Automation
• Blockchain
• Internet of Things

Proposed outputs

• Report describing the concepts, detailing the use cases identified, including some practical worked examples.
• Presentation of findings at GIRO or other appropriate forum.

About

Chair: Edward Plowman
Established: 2019

As modelling techniques and research evolves, liability exposure management is evolving at a fast pace and we as an industry need to be able to understand and develop best practices to monitor and manage accumulation risk and dependencies.

There is also a need to consider how best to represent within carrier’s capital models.

About

Chair: Ramiz Mohamed
Established 2023

The General Insurance Machine Learning in Reserving Working Party (MLR WP) is a group of over 70 volunteers, bringing together a range of data scientists, actuaries and academics from around the globe.

When we started out in 2019, our premise was to find out why, whilst machine learning techniques are widespread in pricing, they are not being adopted ‘on the ground’ in reserving (certainly in the UK). Since then we have been working to help GI reserving actuaries develop data science skills, and are looking at ways that machine learning can be incorporated into reserving practice.

Workstreams

We have a number of different workstreams:

• Foundations – where do I start/how do I learn machine learning?
• Literature Review – we have reviewed over 60 papers and have highlighted a few of the best.
• Research – we are conducting a variety of research projects. We always aim to share the code so you can try it for yourself.
• Practical considerations – how to interpret ML models/explainability, how to deal with the issues reserving teams come across.
• Data – what data is available to develop ML techniques on?
• Survey – why has the uptake of machine learning in reserving been slow and what are UK and Canadian companies doing in-house (from 2020)?

For the most up-to-date information, our blogs, and more detail on the workstreams, please see our Github site or join the conversation on our LinkedIn page.

Contribute as a volunteer

We are open to new volunteers who have the time and enthusiasm to make a contribution. You don't have to be a member of the IFoA to join. If you would like to help us further the research and would like to collaborate with like-minded people, please see the IFoA volunteer vacancies page for how to apply.

About 

Chair: Sarah MacDonnell
Established: 2019

The Ogden Discount Rate Working Party investigates key issues relating to the Ogden discount rate and its effects on the UK (re)insurance industry.

The Ogden rate is an important mechanism in fulfilling the longstanding common law principle that when someone is wrongfully injured, they receive full damages, including for their future financial needs. Changes to the rate are made periodically and the next review is due to take place in England and Wales in 2024.

The aims of the working party include, but are not limited to:

• considering issues and methodologies actuaries may need to allow for in respect of the core actuarial disciplines: this will include reserving, pricing, capital, and reinsurance
• considering and understanding the uncertainties and sensitivities associated with the assumptions underpinning the methodology used to advise on the setting of the discount rate
• supporting transparency by reporting on findings in a way that is not intended to influence the future setting of the personal injury discount rate
• developing a framework for estimating a forward-looking view of the Ogden discount rate

The Ogden Discount Rate Working Party conducts an annual survey of UK (re)insurers with exposure to changes in the Ogden rate. This has enabled:

• creation and publication of market insights regarding expectations for, and impacts of, changes in the Ogden rate
• qualitative feedback from the industry about their concerns and practices as regards to the Ogden rate
• industry discussion through presentations at GIRO

About

Chair: Mohammad Khan
Membership: 11
Established: 2020

This working party investigates Periodical Payment Orders (PPOs) and their effects on the UK insurance and reinsurance industry.

PPOs are a significant feature of insurers' and reinsurers' balance sheets already and are having an impact on pricing and capital modelling efforts of GI actuaries. The Periodical Payments Orders Working Party has been at the forefront of advising GI actuaries about the impacts on their work, such as the need to use life insurance techniques in reserving.

The Periodical Payment Orders Working Party also conducts an annual survey of the UK motor insurance industry about their experience of PPOs. This has enabled:

• creation and publication of statistics about the number, quantum, and nature of PPOs as awarded by the courts
• qualitative feedback from the industry about their concerns and practices as regards to PPOs.

The working party will compile a mortality table of impaired lives due to brain and spinal injury following a severe trauma.

The data is compiled from the UK medical research database of patient records as entered by GPs. Whilst cause of injury is not recorded we hope that the data will be sufficiently close to motor-related accidents that the mortality is a good match. To the best of our knowledge, this is the first time that such an investigation has been attempted. There is considerable call in the insurance industry for such analysis to help pricing, reserving and capital modelling.

About

Chair: Justin Thomas
Established: 2010

This working party examines ways of better detecting (‘sensing’) and responding to change.

It was agreed that waiting for changes in the triangles before taking action is too slow and so the Better Sensing and Responding to Change Working Party was established in order to examine ways of better detecting (‘sensing’) and react to change. The working party reports into the General Insurance Reserving Oversight Committee (GI ROC) and continues to work towards the following objectives:

• To pre-empt changes in the triangles
• To examine how information can be used more holistically
• To better see what’s changing and to develop the best responses to those changes
• To educate individuals and businesses to apply this approach and so ensure they are better prepared.

About

Chair: Chris Smerald
Established: 2015

The Solvency II Practical Review Working Party seeks to evaluate the practical implications of Solvency II one year post-implementation and develop improvements for the PRA to consider in respect of this regulation.

Solvency II was implemented at the start of 2016. Already, however, limitations around the application of key aspects have started coming to light. This working party has been established to conduct a practical review of the regulation in order to better understand these limitations and their implications. Through the process of review, the working party aims to develop a list of possible improvements for the PRA to consider.

The working party will specifically focus on:

• technical Provision calculation and Balance Sheet
• standard Formulae application
• reinsurance application under the different models.

About

Chair: Amrita Pattni
Co-Chairs: Ronnie Bedi – Capital stream leader, and Susan Yang – Technical Provisions stream leader
Established: 2016

The Third Party Working Party investigates emerging claim trends in third party motor insurance.

Objectives

Analyse trends in average cost, frequency, burning cost, and heads of damage for:

• third party property damage (TPD) claims
• capped (<£100,000 in 2010 money terms) third party bodily injury (TPI) claims, and
• excess (>£100,000 claims in 2010 money terms) TPI claims, and
• geographical analysis by major postal towns/cities for the key TPI/TPD metric
• trends in average cost, frequency, and burning cost associated with motor own damage claims
• work in conjunction with the Third Party Consultation and Communication and PPO Working Party to ensure that key messages of interest to the industry, consumers, the press, or government bodies are appropriately aired
• ​collect additional data from within the market or from other sources as the working party sees fit
• maintain appropriate standards with respect to competition law – in particular, no individual company actuary will see any data other than aggregate market data and there will be no discussion around pricing related matter
• all data processing will be hosted by Willis Towers Watson

About

Co-Chairs: Jacqueline Draper, Robert Treen
Established: 2009

This working party explores the governance and design of existing processes within reserving, ensuring that principles-based guidance (small ‘g’) is given.

The objectives of Towards the Optimal Reserving Process Working Party are to:

• investigate common practice within the reserving process and disseminate such information as required, ensuring practitioners are aware of such practices
• describe common issues relating to the reserving process and provide ideas around how to address these within the 'typical' reserving process
• consider emerging trends in reserving process requirements and identify potential ways to address these
• assist in making new reserving methods accessible to the wider Profession by providing practical steps to integrate them within existing reserving processes

About

Chair: William Diffey
Established: 2012

The UK Asbestos Working Party investigates asbestos related claims based on UK market data, investigates trends and reacts accordingly.

The objectives of the UK Asbestos Working Party are to:

• collect UK insurance market data on a yearly basis for UK asbestos-related claims
• collect data relating to UK asbestos-related diseases, such as from the CRU, etc.
• compare trends in survey data against the AWP’s market estimates and react accordingly
• maintain contact with key individuals and organisations such as the HSE, Prof. Peto, etc.
• understand and respond to legal and/or industry developments affecting asbestos-related claims in the UK
• if a new market estimate is required to develop and make available, a population/insurance claim projection models for UK asbestos-related claims.

UK Asbestos Working Party Data Request

The UK Asbestos Working Party periodically carries out market surveys of insurance company UK-asbestos-related claims in order that they can estimate the future cost of UK asbestos-related claims to the insurance industry.

Download the UK asbestos market survey to year-end 2023 (XLSX, 130 KB)

Models and spreadsheets

• Aggregated market data (as at year-end 2022) (XLSX, 160 KB)
• Aggregated market data (as at year-end 2021) (XLSX, 195 KB)
• Models used in 2021 Paper for market estimates (ZIP, 12 MB)
  
• Aggregated market data (as at year-end 2020) (XLSX, 150 KB)
  
• Aggregated market data (as at year-end 2019) (XLSX, 133 KB)
  
• Aggregated market data for years 1999 to 2018 (as at year-end 2018) (XLSX, 145 KB)
  
• Aggregated market data for years 1998 to 2017 (as at year-end 2017) (XLSX, 135 KB)
  
• Aggregated market data for years 1997 to 2016 (as at year-end 2016) (XLSX, 301 KB)
  
• Aggregated market data for years 1996 to 2015 (as at year-end 2015) (XLSX, 322 KB)
  
• Aggregated market data for years 1995 to 2014 (as at year-end 2014) (XLSX, 108 KB)
  
• Aggregated market data for years 1994 to 2013 (as of 2014 Q1) (XLSX, 108 KB)
  
• Replication of HSE mesothelioma TSCE model - Presented at GIRO 2011 (XLSX, 4 MB)
  
• Models used in 2009 Paper for market estimates (ZIP, 9 MB)
  
• Models used in 2004 Paper for market estimates (ZIP, 1.5 MB)

About

Chair: Andy Whiting
Established: 2010