General insurance – Actuarial Applications of Vine Copulas Working Party

Application closing date: 26 January

The Institute and Faculty of Actuaries (IFoA) is seeking to appoint, proactive and innovative volunteers to join the new Actuarial Applications of Vine Copulas Working Party.

Current actuarial industry practice for modelling dependencies does not typically include the use of vine copulas. The main aim would be to increase their use within the actuarial community. This would be done by providing examples showing how they are useful, and providing details on how to use them in practice.

Vines are a kind of graphical model, which can help to identify and organise relationships between variables in high-dimension stochastic modelling. Vines were initially developed in the late 1990s and could be used in insurance to:

  • provide more nuance for dependency modelling, compared to the use of multivariate copulas
  • aid discussions about dependence assumptions with non-technical audiences
  • provide simpler methods of completing incomplete correlation matrices
  • provide methods for combining multiple sets of pre-simulated data

Actuaries are relied upon to ensure that the methods they use are up-to-date and relevant to the problems at hand. It is therefore important that the industry keeps up to date with updates in statistical research and best practice. Vine copulas have been used for over twenty years and should be part of the problem-solving toolkit for actuaries.

Some of our research questions are:

  • To what extent can existing dependence structures in capital models be interpreted as vines, and what benefits arise from this reinterpretation?
  • Can the use of vine copulas aid with expert judgement elicitation for modelling dependencies?
  • Can so-called “aggregation trees” be interpreted in a vine copula context?
  • How best to specify a factor-based dependence model using a vine copula?

Skills/experience

The working party is looking for actuaries who are familiar with existing dependence approaches (such as implicit copulas, Archimedean copulas, measures of association etc) who are interested in helping to identify use cases for vines. Experience writing introductory explanations of technical content will also be useful.

Time commitment

The time commitment varies but we aim to have monthly meetings of approximately one hour to start. Volunteers would be expected to then spend the appropriate amount of time to complete the responsibilities they are ask to take on.

There is a reasonable amount of existing literature which volunteers will need to familiarise themselves with, so the time commitment for this part alone should not be underestimated.

Next steps

If you are interested in this role but would like an informal conversation before applying, please email us at engagement.team@actuaries.org.uk.

If you have read all the above and would like to apply, please send us:

  • brief details of your relevant experience
  • your reasons for wishing to get involved
  • your ARN (if you are a member)
  • a brief copy of your CV and full contact details (if you are a non-member)
  • confirmation that you have read, understood, and agree to the information and requirements laid out in our volunteer information pack (please be aware that until we have received this confirmation, we will not be able to appoint you as a volunteer)

Please email all the above to engagement.team@actuaries.org.uk. Please note, we are unable to accept late applications.

We are committed to promoting diversity, equality of opportunity, and inclusion, within all our vacancies and we actively encourage applications from a diverse range of potential candidates. Recognising and embracing the unique and diverse talents of our volunteers is fundamental to the success of our organisation.

What you need to know

Volunteering provides you with a wide range of opportunities. With all rights and opportunities come responsibilities and we ask all our volunteers to comply with the terms of the IFoA’s governance manual and volunteer information pack. Before offering to provide support, please read through: what you need to know.