GIRO Conference 2024

A session from the PRA covering key updates and messages we’d like to deliver for the upcoming year. The precise structure and detail of the updates will be completed nearer the time. This will cover key topical issues and messages from recent analysis.

Target audience and assumed knowledge level: A high-level talk which should be of interest to all actuaries.

Speaker and company: Daniel Curtis, PRA

Sponsored by hyperexponential

The 2024 State of Pricing report, based on a comprehensive survey of more than 300 actuaries and underwriters, offers an in-depth analysis of the critical challenges and opportunities facing specialty and commercial insurers.

Following the inaugural report in 2023, which revealed that 89% of UK respondents believed their pricing technology needed improvement, and fewer than one in five described their pricing processes as data-driven, the 2024 findings highlight the key issues impeding progress in the industry. The report outlines the essential requirements for achieving meaningful pricing transformation.

Key topics covered include:

• Why pricing processes are broken
• The state of operational inefficiency
• AI and machine learning for insurance
• Collaboration between underwriters and actuaries

Target audience and assumed knowledge level: A high-level talk which should be of interest to all actuaries.

Speaker and company: Tom Chamberlain and Jamie Wilson, hyperexponential

Sponsored by Earnix

This session is designed to be accessible to actuaries at all levels of experience with an interest in machine learning (ML), including senior actuaries and team leaders who want to increase their knowledge on implementing ML in the pricing process.

ML techniques and knowledge are becoming more popular in the pricing process for personal lines. Fairness and transparency requirements are also increasing. How can we benefit from the advantages of ML while meeting regulatory and business requirements?

This session will include discussions on the following:

• What are the potential benefits and risks associated with using ML?
• How can we ensure fair pricing while using ML?
• Should transparency be applicable in all pricing processes?
• Which techniques can reduce variation while maintaining accuracy levels?

The presentation will focus on best practices and practical applications, with real-world examples of how to implement improvements in the pricing process. Experts in the field of AI and actuarial science will lead the session, sharing their insights and experiences with the audience.

Target audience and assumed knowledge level: Actuaries at all levels of experience with an interest in ML.

Speaker and company: Oren Kohavi, Earnix

If the last few years have taught us anything, it's that actuaries need to give sufficient focus to systemic risks – those events where common factors or dependencies between risk areas can lead to an accumulation of impacts across assets, liabilities and operations.

This talk will provide an overview of the role that the Lloyd’s risk management team play to ensure risks associated with systemic events are identified, assessed, managed and monitored. Ultimately, they drive the corporation’s approach to oversight of the Lloyd’s market and protect the financial strength of Lloyd’s and the Lloyd’s Central Fund.

This session will bring together the team's activity across:

• Systemic risk framework, including retrospective review and forward-looking assessment and playbook
• Systemic risk dashboards
• Stress testing and solvency projections
• Internal model validation
• Recovery plan

Target audience and assumed knowledge level: Actuaries across all levels and disciplines within general insurance, particularly those working within risk management functions.

Speaker and company: James Tomlin and Varsini Vijayakumaraguru, Lloyd's

Insurance has historically responded to the changing needs of society. With the growing interconnected digital world, cyber threats are fast becoming a significant concern for all industries: healthcare, IT and telecommunications, military, legal, manufacturing, financial services and others.

As cyber risks are an evolving territory, our session intends to cover cybercrime, cyber insurance and reserving challenges, with a key focus on:

• History of cyber risks and insurance over the last 20 years
• Challenges for insurers due to the ever-evolving nature of losses and lack of historical data
• Risk assessment and regulatory requirements
• Modelling techniques for effective reserving, tail risk assessment including allowance for cyber catastrophes
• Risk mitigation strategies and impact on reserving

In summary, to navigate the complexities of cyber risk, insurers need to be adequately prepared. Reserving actuaries need innovative approaches to estimating the potential liabilities, as traditional static models may not capture the entire risk spectrum.

This will be a technical session and will aim to answer the pressing questions that actuaries at all levels have around this emerging class of business.

Target audience and assumed knowledge level: Basic reserving knowledge would be assumed but is not essential.

Speaker and company: Chehak Jain and Paul Goodenough, AXA XL

In recent years, a lot of focus has been placed on climate change, biodiversity and the relationship between the two. However, while modern slavery does not contribute directly to increased risks in climate change and/or biodiversity loss, both those things can act to increase the risk of modern slavery.

Despite this, modern slavery has not been at the forefront of ESG policies across the world.

In our talk we will be looking at:

• Overview of modern slavery regulations: Summarize key legislation aimed at combating modern slavery across different jurisdictions
• Explore how companies across various industries are adapting to regulatory demands and the effectiveness of their modern slavery policies, including disclosing their footprint and the actions taken (if any) to address it
• Discuss the key blockers to allowing progress in this area at a similar level seen to date in climate change and biodiversity
• Deep dive into a worked example of how to quantify a company’s negative contribution to modern slavery, taking the insurance industry as an example. Valuation methods considered:

1. 1. Valuation/counterfactual analysis
   2. Economic theory
   3. Discounted cash flow analysis

Target audience and assumed knowledge level: This session will include high level concepts around modern slavery and a technical element around quantifying a company’s footprint despite lack of data.

Speaker and company: Raluca Stefan, Grant Thornton, and Shana Vida Gavron, Endangered Wildlife

Investment returns are critical to insurers seeking to generate a competitive return on equity. The economic environment has shifted decisively in recent years: high and volatile interest rates are the norm, inflation is impacting both sides of the balance sheet and geopolitical uncertainty has increased. It’s estimated that 100bps higher investment yield is worth as much as a 250bps fall in combined ratio, underscoring the importance for shareholders.

The impact of this new paradigm is also beginning to be felt in credit and equity markets. Climate change makes it ever more important to consider asset and liability risks in tandem, to avoid doubling up on risk. At the same time, investment must play its part in supporting solvency and credit rating targets, and liquidity needs to be maintained across one or multiple entities.

In this session we will discuss how insurers can meet these challenges, and how investment teams can work effectively with risk, capital and underwriting colleagues to deliver strong returns and harvest the illiquidity premium.

Target audience and assumed knowledge level: Actuaries at all levels with an interest in investments including capital, risk and underwriting actuaries.

Speaker and company: Kedi Huang, Aspen, and William Gibbons, Mercer

Target audience and assumed knowledge level: Actuaries at all levels with an interest in investments including capital, risk and underwriting actuaries.

Speaker and company: Kedi Huang, Aspen, and William Gibbons, Mercer

Federated learning is a new method of training machine learning models pioneered by Google in 2016 for use on smartphones. This concept enables the direct training of machine learning models on users’ devices, eliminating the need to share or transfer potentially sensitive data to a centralized server.

Unlike traditional machine learning methodologies, federated learning adopts a model where the algorithm is brought to the data, rather than transferring the data to the algorithm.

In this presentation, the Federated Learning Working Party (part of the IFoA Data Science Research Section) will illustrate how insurers can leverage this technique.

We will show how companies can collaboratively develop a neural network model to predict claims frequency. This collaboration allows for the combination and utilization of their customer data without sharing or compromising any sensitive information. This maintains data privacy while building an AI model. We achieve this using the Flower and PyTorch packages in Python.

We will cover the basics of how federated learning uses a unique form of encryption that enables modelling without the need to see sensitive data, using simple, easy to follow examples.

Target audience and assumed knowledge level: No prior knowledge of federated learning necessary. Some familiarity with claims frequency and neural network modelling is assumed.

Speaker and company: Dylan Liew, BUPA, Malgorzata Smietanka, UCL, Michelle Chen, AIG

This roundtable session is a follow-up to the GI Pricing Research Group's webinar ‘Fair's fair: the future of pricing’, presented at the IFoA General Insurance Spring Conference.

The session will allow interested actuaries to discuss the issues raised in that webinar around fairness and equity in pricing and product design, and come up with some action plans.

It includes the following topics:

• Validating whether the ethnicity penalty and poverty premium exist
• Reviewing the effectiveness of GIPP and its impact on actual rate movement
• Defining fairness in pricing
• Applying fairness definitions to models and pricing frameworks
• The actuarial role in applying fairness principles
• Potential market or regulatory solutions to help deliver fairness and financial inclusion
• Potential structural solutions for ‘essential’ insurance as a social policy response

This workshop is also intended as a launchpad event for a Fair Pricing Action Taskforce, although attending the roundtable is not a commitment to join.

Target audience and assumed knowledge level: Advance knowledge required.

Speaker and company: Edward Plowman, Guy Carpenter, Andy Goldby, The Floow, Laura Evans, Flood Re

Our research, which is currently underway, is based on input from heads of reserving and chief actuaries (or similar) at insurers and reinsurers across the UK, Americas, EMEA and APAC.

The focus of our work is to better understand the current reserving challenges faced by businesses, as well as their visions for the future.

We will present the findings of our analysis, which will include an overview of the current state of play across the market; expectations for where firms are focusing next and our blueprint for a market-leading reserving process for 2024 and beyond.

Target audience and assumed knowledge level: No specialist knowledge required.

Speaker and company: Cat Drummond and Melissa Tam, LCP

The Ogden discount rate stands as a pivotal factor for insurers and reinsurers, shaping the landscape of pricing and reserves for UK bodily injury claims.

The two most recent indicators of the Ogden discount rate in England and Wales range from +1% to roughly -0.1%: a huge range that has significant implications.

As the Ministry of Justice embarks on an intensive review of the Ogden rate, this GIRO session will enable actuaries to understand what the key decision factors will be, vital areas to focus on and how to navigate where the rate may end up in January 2025. In particular, this session will consider:

• Unveiling potential transformations: dive into the realm of possible transformations as spurred by recent calls for evidence
• Harnessing the power of response: we will unveil insights gleaned from our collaborative response with the IFoA to the latest call for evidence and discussions with key stakeholders
• Unveiling industry sentiments: delve deep into the heart of the industry with the unveiling of our survey results, focusing on the current readiness of the industry and what can be done to prepare
• Peering into the crystal ball: we will shed light on the potential trajectory of the discount rate
• What about reinsurers? Step into the spotlight as we dissect the nuanced impacts for reinsurers, providing invaluable insights into the landscape of the industry.

Target audience and assumed knowledge level: No specialist knowledge required.

Speaker and company: Eoin Lynch, Andrew Corner and Mohammad Khan, PwC

Typically, regulatory models aggregate risks using correlation matrices and the covariance method. Internal capital models used by insurance companies, however, typically aggregate risks using simulation methods and copulas. For risk measures like VaR and TVaR, with non-normal marginal distributions or non-Gaussian copulas, these methods give different results.

In this session we will present the results of the work of the AFIR/ASTIN working party on risk aggregation with correlation matrices, which investigated the differences for a range of copulas and marginal distributions. We used simulation techniques rather than a theoretical approach.

Target audience and assumed knowledge level: Actuaries at all levels with an interest in comparing techniques for aggregating risk and understanding the differences in the output of regulatory models and internal capital models.

Speaker and company: Robert Scarth, AXIS Capital

Actuaries can gain strategic insights by studying the success patterns of leading social media influencers and case studies of highly successful industry influencers.

The objective of this session is to explore innovative pathways through which actuaries can extend their influence beyond conventional roles by:

Leveraging social media dynamics:

• Strategies for success adopted from social media influencers
• Embracing authenticity and diversity in professional personas
• Asserting ownership from project inception to decision-making
• Mastering the art of self-promotion for the ‘extroverted’ actuary
• Cultivating a distinctive leadership style

Case study exploration:

• The digital-native Gen Z actuary
• The journey to chief underwriting officer: key behaviours for success
• The consultancy approach: broadening the actuarial mindset
• The FinTech leap: lessons from a coder’s rise to CTO in six years

Inclusive gender dynamics and career longevity:

• Insights from original research on actuarial gender distribution by age
• Collaborative learning across all gender experiences
• Using influencing skills for career resilience during life’s intermissions

Target audience and assumed knowledge level: No specialist knowledge required.

Speaker and company: Wendy Kriz Evans, LCP and Karen Dayal, Aviva

Target audience and assumed knowledge level: All actuaries working in insurance, particularly in risk and capital, whether they’re at firms, consultancies or brokers.

Speaker and company: TBC

Presented by the IFoA GI Pricing Research Group (PRG), we will cover a macro-level view of the current issues influencing pricing in three main sections:

Part 1: Profitability, drivers and trends

To open the session, we will provide an overview of levels of profitability from the recent past, the present, and projected into the future, with discussion on the main drivers and trends. This will cover both:

• The UK domestic market (motor and home in particular)
• The Lloyd's/London market and global P&C (re)insurance

Part 2: The issues register

In this part, we will cover highlights from the issues register maintained by the PRG, which captures the main influences currently affecting pricing, pricing functions and the role of actuaries in pricing. This will include:

• PESTLE analysis of external factors influencing pricing
• Developments in best practice and research
• Horizon scanning: emerging risks and trends
• Brief overview of the activities of the PRG and IFoA in addressing these issues

We are also considering a survey of pricing actuaries and/or conducting a chief pricing actuary roundtable; findings from these may also be included.

Part 3: The pricing function in 2024

Finally, we look at how pricing and portfolio management functions should be acting to address the challenges of the current environment, and evolving to address those of the future.

Target audience and assumed knowledge level: No specialist knowledge required.

Speaker and company: Edward Plowman, Guy Carpenter

UK, US and EU CPI inflation may have trended downward from their recent peaks, but the economic, political and climatic environments remain as uncertain as ever.

Our presentation will provide an update from the Claims Inflation Working Party on:

• Best practice, governance and practical examples regarding the estimation of future claims liabilities in times of high and uncertain inflation
• How best to make use of economic indices in guiding claims inflation estimates
• Wider approaches to gaining insight on inflationary trends and associated governance around the process of setting inflation assumptions

Our update will also include results from our third annual inflation survey, comparing actual vs expected CPI inflation for 2024 and highlighting key changes in views on class-specific inflation and inflation uncertainty.

Target audience and assumed knowledge level: Actuaries at all levels regardless of their experience, background or area of focus.

Speaker and company: Richard Stock, Tindall Riley and Cian Creedon, Aon and Shane Lenney, SCOR

Dependency parameters are often among the most material assumptions in a capital model, but also tend to be among the most uncertain. This is due to the relative lack of historical data available to parameterise them, which forces a reliance on expert judgment.

The goal of this talk is to outline an approach to help refine and improve the parameterisation process, by combining quantitative analysis of historical data with the more traditional qualitative assessment of key drivers. Using a real-world dataset from a multi-line insurer, we will cover:

• A summary of current parameterisation approaches used in the market
• A worked example of statistical analysis of historical correlations between classes, explaining the main factors of variation with reference to real-world economic, climate and other variables
• Discussions of the pros and cons of different modelling approaches
• Comparison of the quantitative analysis with the qualitative expert judgments selected by business experts
• Analysis of market data to understand better how dependencies vary across companies, and for different pairs of classes of business.

Target audience and assumed knowledge level: There will be some technical content, but the aim is to present the issues in an accessible way that does not require capital modelling expertise.

Speaker and company: Neil Gedalla, LCP, Stuart Green and Rowald van der Walt, Old Mutual Insure

The UK government’s contingent liabilities are complex and varied and have an uncertain impact on government finances. They range from nuclear decommissioning to international guarantees supporting developing countries, from clinical negligence claims in the NHS to procurement indemnities for large infrastructure projects.

They can be an important policy tool in supporting economic growth and meeting the government’s objectives. However, it is imperative that when government takes on risk, the risk is well understood and managed.

In 2021 a Contingent Liability Central Capability (CLCC) team was established within UK Government Investments (UKGI) in partnership with the Government Actuary’s Department (GAD). The CLCC supports government departments in the evaluation, pricing and management of guarantees and insurance. It also monitors and reports on the government’s overall portfolio of risk from contingent liabilities, and published its first full review in November 2023.

Target audience and assumed knowledge level: No specialist knowledge required.

Speaker and company: Owen Dimbylow and Jonathan Day, UKGI, Gina Mosquera, Government Actuary's Department

The golden age of actuarial system engineering is only set to continue. Increasingly, in-house and third-party solutions put actuaries at the heart of crafting core business tooling.

Last year's talk, ‘Building systems that last’, focused on principles and practices aimed at ensuring the systems of today are maintainable and understandable tomorrow. This year's ‘Building systems that fast’ focuses instead on the principles, practices and intuition behind building highly performant systems that don't leave their users wanting.

The target audiences for this talk are creators, designers and users of actuarial tools and systems along with anyone with an interest in actuarial technology. It will be highly accessible, providing necessary and sufficient background for all concepts discussed. If you've ever used a tool at work and wondered why it's taking so long to complete, this is the talk for you.

Attendees will come away with:

• Practicable approaches to designing systems that perform well
• Performance heuristics and an understanding of the limits of optimisations
• The ability to discuss performance intelligently and create supporting evidence
• Intuition of how computers work and interact with one another

With more and more data being stored and processed by insurance companies than ever before, now is the time to upskill and turbocharge the performance of your applications.

Target audience and assumed knowledge level: No specialist knowledge required.

Speaker and company: Thomas Hamilton, L DATA. T DATA

Taking into account how the two diverse topics of sustainability and modern data analytics are rapidly developing within the general insurance segment of the insurance market, we would like to shed light on what can we achieve at the intersection of the present and the future perspective.

Our report will be structured as 4 subjects:

• Introduction – how actuaries are utilising data science techniques across their specialism, what topics are driving the sustainability space, current regulatory guidance and how we address all of the above within the IFoA data science practice board.
• Enhanced methods applied to the classical actuarial problems – this is no longer simply about frequency and severity. What type of known ESG-related subjects, including but not limited to natural catastrophes as well as modern financial instruments, can be approached with a deep support of analytical techniques?
• New dimensions and products – clients’ and markets’ expectations from the insurance companies’ sustainable revolution, along with corresponding opportunities.
• Challenges to overcome – what do we, as an industry and a profession, need to address in order to stay at the forefront of the sustainable agenda?

Target audience and assumed knowledge level: Prior knowledge required.

Speaker and company: 

Alexey Mashechkin, Allianz
Debashish Dey, Deloitte
George Tzougas, Heriot-Watt University
Shubham Mehta
Vasilki Kotroni

In 2022 the IFoA General Insurance Climate Change Reserving Working Party embarked on a mission to reframe the professional discussion surrounding climate change. Our pitch was that practical activity was needed, not moralising or hand-wringing.

In 2023 we set out some foundations by outlining the key issues around climate change that general insurance reserving actuaries needed to be aware of. We also shared some practical steps that could be taken.

This year, we continue to develop this work, addressing three sets of questions:

1. Based on our 2024 survey, how far has the reserving actuary come since 2022? What does good practice around climate change reserving look like for 2024 year-end?
2. How should reserving actuaries help insurers build reserving scenarios and other tools to meet the demands of boards, regulators and other stakeholders?
3. What are the key steps for reserving actuaries and how can they develop and strengthen links with other parts of the business? How can actuaries in other disciplines derive value from the work of reserving actuaries? Where does the boundary lie when deciding whether climate change sits in the reserving space, or should remain another item on the emerging risk register?

Target audience and assumed knowledge level: Prior knowledge required.

Speaker and company: 

Alex Marcuson, Marcuson Consulting Ltd
Josie Durley, Nephila Syndicate Management
Sarah Grimshaw, Riverstone International

The IFoA’s Climate Stress and Scenario Working Party has been developing a framework to help companies build organisation-specific, decision-useful climate narratives and stress and scenario tests. We will be publishing this paper in Q3 2024.

The aim of this presentation is to present our framework for climate stress and scenario testing. It will be of interest to organisations starting out on their climate scenario journeys, as well as those looking to advance their current approaches. It will also be of interest to actuaries working in the climate space and responsible for developing climate and other scenarios.

Target audience and assumed knowledge level: No specialist knowledge required.

Speaker and company: 

Deepanjali Talwar, Nordea Bank
Adel Drew, Milliman
Madhuri Kumar, Ultimate Risk

Earth’s climate may be more sensitive than we thought. Climate change has arrived, with severe impacts emerging at lower temperatures than expected. The distribution has shifted – historic tail risks are now expected.

Climate Scorpion is the latest IFoA research collaboration with climate scientists. It explores the potential for extreme climate risks, their knock-on social effects and the actions we can take to manage them.

Join us to share the findings and implications of the Climate Scorpion paper. The session will cover:

• why science needs to be complemented by risk
• how we underestimated climate change
• reasons for hope
• how actuaries could save the day

We'll explain why it’s so risky to go past the 1.5C ‘net zero’ target, why it’s likely we will and how we can apply financial services risk management techniques to the climate change challenge.

Target audience and assumed knowledge level: No specialist knowledge required.

Speaker and company: 

Georgina Bedenham, Government Actuary's Department
Oliver Bettis, Great Lakes Insurance SE

The Climate Scenario Working Party’s engaging and interactive workshop is tailored to the needs of the general insurance market. Its aim is to collaboratively develop a new climate scenario that will serve as a valuable tool for informing business strategies within the insurance industry.

Throughout the workshop, we will provide a comprehensive overview of the practical applications of climate scenarios and highlight the benefits of scenario analysis.

Workshop agenda:

• establishing the scene with some high-level information and probing questions to delve into the complex challenges faced by life insurers
• providing a scaffold to structure the scenario and define its boundaries
• collaboratively determining the problem statement and identifying the specific areas of general insurance impacted by climate risk
• exploring the potential impacts of climate risk on various types of general insurance business, differentiating between physical, transition and litigation risks

The workshop promises to be an insightful and interactive session, offering participants the opportunity to steer the development of a scenario and explore the potential impacts of climate risk on the insurance industry.

We look forward to engaging with our audience in this collaborative exercise, ultimately contributing to enhanced strategic planning and risk management within the general insurance market.

Target audience and assumed knowledge level: No specialist knowledge required.

Speaker and company: 

Juweena Appanah, Crowe LLP
Dhruv Gavde, University of Kent

The IFoA's Climate Change Reporting and Disclosure Working Party has recently published a series of articles in The Actuary and the British Actuarial Journal. These articles set out the actuarial implications of climate change disclosure requirements.

The working party is made up of a range of backgrounds and industries, including consulting, pensions, life and general insurance. Our conclusions apply generally to actuaries with an interest in sustainability and specifically to general insurance actuaries and insurers.

In this session we propose building on our reports to identify specific potential impacts on general insurance firms and actuaries, by considering:

• What are the current reporting requirements and what do they require?
• What are the incoming reporting requirements relevant to UK actuaries?
• What do actuaries need to be thinking about now to meet these requirements?
• Why should actuaries be involved in sustainability data and reporting and what benefits does the actuarial skillset bring?

Our presenters cover a range of industry initiatives and can offer deep insights into industry-specific reporting requirements.

Target audience and assumed knowledge level: No specialist knowledge required.

Speaker and company: 

Lloyd Richards, Crowe
Debashish Dey, Deloitte

How will the general insurance industry adapt to the rising tide of climate change litigation? What strategies can be implemented to mitigate these risks? And how can insurers leverage this shift to foster a more sustainable future? These are critical questions that industry leaders must address to shape a resilient future.

The surge in climate-related lawsuits demands robust risk assessment and innovative policy frameworks, compelling the industry to play a proactive role in promoting sustainability. Leveraging insights from lawyers and climate-scenario experts, our session will explore the profound impact of climate litigation on the general insurance industry.

We will discuss the key challenges insurers face from the increasing risk of climate-related litigation and highlight what front-runners are doing to prepare for this emerging issue. In particular, we will dive into real-life examples of what an insurer with material D&O exposure can do to assess it.

Target audience and assumed knowledge level: No specialist knowledge required.

Speaker and company: Sarah Clare, Hymans Robertson

As climate change accelerates, the actuarial profession faces unprecedented challenges in effectively assessing flood-related risks.

This session will explore how climate change is reshaping the role of actuaries. With a shift from reliance on historical data to the integration of advanced technologies and climate models, actuaries can better predict future climate risk scenarios and manage uncertainty.

Drawing on extensive research and cutting-edge solutions developed by Fathom, attendees will benefit from the latest findings and practical applications of advanced flood risk assessment tools. They’ll leave with actionable knowledge that will enhance their professional practice.

Target audience and assumed knowledge level: Prior knowledge required.

Speaker and company: Paul Bates, University of Bristol

In 2022 the IFoA General Insurance Climate Change Reserving Working Party embarked on a mission to reframe the professional discussion surrounding climate change. Our pitch was that practical activity was needed, not moralising or hand-wringing.

In 2023 we set out some foundations by outlining the key issues around climate change that general insurance reserving actuaries needed to be aware of. We also shared some practical steps that could be taken.

This year, we continue to develop this work, addressing three sets of questions:

1. Based on our 2024 survey, how far has the reserving actuary come since 2022? What does good practice around climate change reserving look like for 2024 year-end?
2. How should reserving actuaries help insurers build reserving scenarios and other tools to meet the demands of boards, regulators and other stakeholders?
3. What are the key steps for reserving actuaries and how can they develop and strengthen links with other parts of the business? How can actuaries in other disciplines derive value from the work of reserving actuaries? Where does the boundary lie when deciding whether climate change sits in the reserving space, or should remain another item on the emerging risk register?

Target audience and assumed knowledge level: Prior knowledge required.

Speaker and company: 

Alex Marcuson, Marcuson Consulting Ltd
Josie Durley, Nephila Syndicate Management
Sarah Grimshaw, Riverstone International

The IFoA’s Climate Stress and Scenario Working Party has been developing a framework to help companies build organisation-specific, decision-useful climate narratives and stress and scenario tests. We will be publishing this paper in Q3 2024.

The aim of this presentation is to present our framework for climate stress and scenario testing. It will be of interest to organisations starting out on their climate scenario journeys, as well as those looking to advance their current approaches. It will also be of interest to actuaries working in the climate space and responsible for developing climate and other scenarios.

Target audience and assumed knowledge level: No specialist knowledge required.

Speaker and company: 

Deepanjali Talwar, Nordea Bank
Adel Drew, Milliman
Madhuri Kumar, Ultimate Risk

Earth’s climate may be more sensitive than we thought. Climate change has arrived, with severe impacts emerging at lower temperatures than expected. The distribution has shifted – historic tail risks are now expected.

Climate Scorpion is the latest IFoA research collaboration with climate scientists. It explores the potential for extreme climate risks, their knock-on social effects and the actions we can take to manage them.

Join us to share the findings and implications of the Climate Scorpion paper. The session will cover:

• why science needs to be complemented by risk
• how we underestimated climate change
• reasons for hope
• how actuaries could save the day

We'll explain why it’s so risky to go past the 1.5C ‘net zero’ target, why it’s likely we will and how we can apply financial services risk management techniques to the climate change challenge.

Target audience and assumed knowledge level: No specialist knowledge required.

Speaker and company: 

Georgina Bedenham, Government Actuary's Department
Oliver Bettis, Great Lakes Insurance SE

The Climate Scenario Working Party’s engaging and interactive workshop is tailored to the needs of the general insurance market. Its aim is to collaboratively develop a new climate scenario that will serve as a valuable tool for informing business strategies within the insurance industry.

Throughout the workshop, we will provide a comprehensive overview of the practical applications of climate scenarios and highlight the benefits of scenario analysis.

Workshop agenda:

• establishing the scene with some high-level information and probing questions to delve into the complex challenges faced by life insurers
• providing a scaffold to structure the scenario and define its boundaries
• collaboratively determining the problem statement and identifying the specific areas of general insurance impacted by climate risk
• exploring the potential impacts of climate risk on various types of general insurance business, differentiating between physical, transition and litigation risks

The workshop promises to be an insightful and interactive session, offering participants the opportunity to steer the development of a scenario and explore the potential impacts of climate risk on the insurance industry.

We look forward to engaging with our audience in this collaborative exercise, ultimately contributing to enhanced strategic planning and risk management within the general insurance market.

Target audience and assumed knowledge level: No specialist knowledge required.

Speaker and company: 

Juweena Appanah, Crowe LLP
Dhruv Gavde, University of Kent

The IFoA's Climate Change Reporting and Disclosure Working Party has recently published a series of articles in The Actuary and the British Actuarial Journal. These articles set out the actuarial implications of climate change disclosure requirements.

The working party is made up of a range of backgrounds and industries, including consulting, pensions, life and general insurance. Our conclusions apply generally to actuaries with an interest in sustainability and specifically to general insurance actuaries and insurers.

In this session we propose building on our reports to identify specific potential impacts on general insurance firms and actuaries, by considering:

• What are the current reporting requirements and what do they require?
• What are the incoming reporting requirements relevant to UK actuaries?
• What do actuaries need to be thinking about now to meet these requirements?
• Why should actuaries be involved in sustainability data and reporting and what benefits does the actuarial skillset bring?

Our presenters cover a range of industry initiatives and can offer deep insights into industry-specific reporting requirements.

Target audience and assumed knowledge level: No specialist knowledge required.

Speaker and company: 

Lloyd Richards, Crowe
Debashish Dey, Deloitte

How will the general insurance industry adapt to the rising tide of climate change litigation? What strategies can be implemented to mitigate these risks? And how can insurers leverage this shift to foster a more sustainable future? These are critical questions that industry leaders must address to shape a resilient future.

The surge in climate-related lawsuits demands robust risk assessment and innovative policy frameworks, compelling the industry to play a proactive role in promoting sustainability. Leveraging insights from lawyers and climate-scenario experts, our session will explore the profound impact of climate litigation on the general insurance industry.

We will discuss the key challenges insurers face from the increasing risk of climate-related litigation and highlight what front-runners are doing to prepare for this emerging issue. In particular, we will dive into real-life examples of what an insurer with material D&O exposure can do to assess it.

Target audience and assumed knowledge level: No specialist knowledge required.

Speaker and company: Sarah Clare, Hymans Robertson

As climate change accelerates, the actuarial profession faces unprecedented challenges in effectively assessing flood-related risks.

This session will explore how climate change is reshaping the role of actuaries. With a shift from reliance on historical data to the integration of advanced technologies and climate models, actuaries can better predict future climate risk scenarios and manage uncertainty.

Drawing on extensive research and cutting-edge solutions developed by Fathom, attendees will benefit from the latest findings and practical applications of advanced flood risk assessment tools. They’ll leave with actionable knowledge that will enhance their professional practice.

Target audience and assumed knowledge level: Prior knowledge required.

Speaker and company: Paul Bates, University of Bristol

The Capital Research Group is an IFoA forum for the leading capital modelling experts in the industry. This session is a follow-up to the previous session the group ran at 2023 GIRO. Here the group will cover some of the recent discussion points and conclusions, covering topics such as:

• modelling of systemic drivers and dependencies
• the use of generative AI and machine learning in capital modelling

Target audience and assumed knowledge level: Prior knowledge required.

Speaker and company: Chris Bird, WTW

Asbestos. Opioids. Enron. Covid-19. Losses arising from these events can emerge over many years, and can impact different sectors and lines of business that may previously have seemed unrelated.

Given the low frequency and distinct nature of these events, different methodologies have been used to try to measure and manage accumulation risk. There is no single, easy answer and questions include:

• what does good liability exposure data look like?
• how do we define, record and store coverage details and exclusions within liability policies?
• how do we define and label “liability cats” consistently across the insurance and reinsurance market?
• what does horizon scanning mean, and what are best practices around it?
• how do we identify and prioritise newly emerging risks?
• how do we create scenarios to quantify these risks?
• how do we best understand the connectivity between sectors and lines of businesses?
• how do we best use historic events to create future scenarios despite new exclusionary language in place?
• how do we set risk appetites against risks that emerge slowly over time?

In this session, members of the Liability Exposure Management Working Party will present the workstreams we have in place, and deep dive into a recent survey conducted across the market on liability exposure data.

Target audience and assumed knowledge level: High-level session rather than a technical one. This talk is relevant for anyone in exposure management, or who relies on exposure management outputs. Capital, reserving and pricing would benefit from this talk.

Speaker and company:

Ramiz Mohamed, SiriusPoint
Matthew Counsell, Brit
Matthew Lewis, Praedicat

Following Nationwide’s decision to stop granting mortgages on some properties exposed to high flood risk, new solutions may be needed sooner than we think.

Can our general insurance actuarial community help? As a profession, are we duty bound to help? And if so, how?

UK flood insurance remains affordable through the current Flood Re scheme for many of those at risk of significant flooding. This scheme is particularly important for those most vulnerable in our society, especially given the ongoing cost of living crisis and the increasing impact of climate change.

However, a growing number of people living in flood-prone areas are becoming excluded, and the current scheme is due to end – in law – in 2039.

Our presentation will include:

• a brief recap of the UK flood insurance market and approach to flood risk mitigation
• results from our upcoming flood survey, which will capture:
  
  • general awareness of Flood Re
  • views on potential scheme coverage beyond 2039
  • views on the appropriateness of risk reflective pricing for flood risk
  • early thoughts on potential solutions for post-2039, including insights from other countries
  • wider aspects of flood risk and resilience considerations that could be considered, such as nature-based solutions

Target audience and assumed knowledge level: No specialist knowledge required.

Speaker and company: 

Richard Stock, Tindall Riley
Laura Evans, Flood Re
Marcus Schofield, Marcuson Consulting

The past 50 years have seen computing and technology take a near quantum leap forward.

In some ways, our reserving processes have benefited. They run faster, segment the business into more classes, and give us access to a wider range of diagnostics to help us make informed judgements. Despite this, the contents of our reserving toolkit, the assumptions we consider and the way we apply judgment have remained remarkably similar.

AI development is racing ahead at breakneck speed, and the reserving community already has access to a plethora of papers and practical tools to bring machine learning to reserving.

This debate will consider how AI, machine learning and automation will shape the reserving process of the future. Does the future hold yet more incremental improvements to our existing processes, or does it herald a more fundamental re-think of how we set reserves?

We will bring together members of the IFoA’s GI reserving research group and senior reserving actuaries from the GI industry to present contrasting visions of how the reserving process of the future might look. We will consider all aspects of the process: the data, the methods, the role of the actuary and how/what we report to our stakeholders.

Target audience and assumed knowledge level: Prior knowledge required.

Speaker and company: Ed Harrison, IFoA GI Reserving Research Group

Join us for an informative session on building predictive pricing models in the commercial and specialty insurance sector.

In this talk, Jake Morris and Jamie Wilson will share their extensive experience in the London market, exploring how data-driven methodologies can transform pricing strategies even when data is scarce. They will address key questions such as:

• can statistical learning methods be effective with fewer than tens of thousands of claims?
• what strategies can be employed for new products without claims experience?
• how can underwriters be encouraged to adopt data-driven pricing tools?
• is retraining necessary for teams to develop sophisticated models?

Whether you're an actuary or data scientist, this session will equip you with the knowledge required to navigate the complexities of data-limited predictive modelling and advance your organisation's pricing capabilities.

Target audience and assumed knowledge level: No specialist knowledge required.

Speaker and company: 

Jake Morris, Allianz Commercial
Jamie Wilson, hyperexponential

What does own risk and solvency assessment (ORSA) mean to you? Is it fundamental to your business or a box-ticking exercise?

Leveraging insights from the Hymans Robertson 2024 GI ORSA survey, this interactive session will explore the evolving regulatory landscape for ORSA reporting as well as current and emerging industry practice.

In this session, we’ll:

• explore emerging approaches to risk identification and scenario analysis
• compare internal uses and attitudes towards ORSA between organisations of different sizes, types and complexity
• address the growing emphasis on forward-looking ORSA reporting beyond mere compliance
• discuss the varying ways insurers can use ORSA to inform strategic decision-making

Finally, we'll explore emerging best practice and innovative solutions to enhance the effectiveness and efficiency of the ORSA reporting processes.

From leveraging technology and automation to fostering a culture of risk awareness and accountability, we'll discuss practical strategies for optimising ORSA reporting frameworks and delivering greater value to stakeholders.

Target audience and assumed knowledge level: Prior knowledge required.

Speaker and company: Murray Lidgitt and Muhammad Ali, Hymans Robertson

The legacy deal market has grown significantly over the last five years, with 238 deals publicly announced, transacting more than £40bn of reserves.

Actuaries at all levels interact with deal processes, and our technical expertise, numerical grounding and strategic thinking skills bring real value to our colleagues, investors and clients.

This session aims to be an approachable discussion of the topic, giving actuaries of all levels a glimpse into the deal process, and the points where actuaries can be involved.

We will touch on the technical elements of deal pricing, with discussion of the wider economic environment and strategic business goals.

We will cover:

• overview of the deal pricing process: who gets involved and when and how to spot opportunities to get involved
• buy side considerations: how legacy buyers think about deals, including pricing and non-quantitative considerations, and how different buyers think about deals
• key pricing assumptions: what they might be and how the wider economic and business environment affects them, how your strategy might change them and how to think about uncertainty
• deal pricing from the sell side: how in-house actuaries can bring their expertise to bear to help colleagues and advisors achieve the best price, and how to think about your book commercially

We will encourage lively discussion on these topics. Even the most junior trainees should feel able to contribute, while benefiting from the strategy and negotiation experience more senior attendees can bring.

Target audience and assumed knowledge level: No specialist knowledge required.

Speaker and company: Philip Jacob and Hatty Sharp, PwC

Members of the Towards the Optimal Reserving Process (TORP) Working Party explore how advances in data analytics will change how reserving actuaries source insights from claims, underwriting and finance teams.

The working party will bring these concepts to life using case studies and research covering:

• reserving processes in run off
• M&A
• climate change impact on reserving processes
• motor claims analytics
• IFRS 17 assessment

Given historically poor linkage between finance, claims and underwriting, it is important to talk to the data/MI, to be able to self-serve and to avoid being overwhelmed by anecdote and volume.

The session will then look at how reserving processes are being embedded into operational and underwriting systems. It will draw on the latest trends in reserving risk and data analytics and consider the trend towards implied actuarial sign-off of business plans.

Target audience and assumed knowledge level: No specialist knowledge required.

Speaker and company: 

William Diffey, QBE Europe
Malcolm Cleugh, RSA
Arun Vijay, BDO

The PRA collects large amounts of data from firms. Solvency UK will create reporting changes, for example reducing the scope of data collected. This session will provide an overview of some of the key changes and what to look out for in the reporting reforms.

We want to showcase where we use the regulatory data and the projects it contributes to, for example:

• model drift analysis
• YE reserving analysis
• firm supervision
• ORSA/SFCR reviews

We’ll explain the insights we get from the data and discuss some of the pitfalls we see when firms submit it.

We hope to leave attendees with key points they can take back to improve/update their regulatory data submissions. We aim to help firms understand how they could use the regulatory information they produce, and understand how the PRA values these submissions and how they form an integral part of our work.

Target audience and assumed knowledge level: All actuaries working in insurance, particularly in firms, and those who contribute to reporting.

Speaker and company: TBC

When issue alerts strike, how can you efficiently anticipate and monitor their impacts?

The Sensing and Responding to Chaos and Nonsense Working Party (SRChN) sees actuaries as systems professionals helping clients navigate a complex systems landscape.

We will share, through practical examples, an easy-to-follow framework for getting to the bottom of the likely effects of current or emerging changes in the insurance environment. The session will also involve identifying cross-linked external factors and going through a checklist to find which parts of the insurance operation might be affected.

The next level of analysis involves:

• listing out plausible impacts for each potentially affected area
• going through a process to evaluate the likely nonlinearity of the impacts
• identifying what data might be available to monitor impacts and in what way

As a result, actuaries will be better equipped to adapt their analyses, find allies and show leadership in managing issues.

Target audience and assumed knowledge level: No specialist knowledge required.

Speaker and company: 

Christopher Smerald, Broadstone
Ian Thomas, Aurora

Practical tips on portfolio strategy and pricing framework design

Insurers across the commercial and specialty markets have identified upgrading pricing technology as a key lever for unlocking value. However, re-platforming pricing tools is simply the first step in a journey towards market-leading profitability.

There are many options and many questions to consider when answering the question ‘what next?’:

• how to think through the pricing strategy, prioritisation and team set up
• how to build out the right pricing governance frameworks
• how much investment pricing tools need once they’re replatformed
• what key metrics and data are needed to drive positive change
• how to embed a strong portfolio steering process, and how that ties up to pricing tools
• preparing for the soft market

James Anderson, Nathalie Balson and Jamie Wilson will address these questions, drawing from their own experiences of leading pricing teams and from their work with insurers across the market.

Target audience and assumed knowledge level: No specialist knowledge required.

Speaker and company: 

James Anderson, Ernst & Young
Nathalie Balson, Starr Underwriting Agents Limited
Jamie Wilson, hyperexponential

Large losses account for approximately 20% of claims cost for UK motor insurers – arguably the most volatile yet least understood 20%. Periodic payment orders are a significant proportion of this cost, and continue to be strongly affected by evolving trends and legislation in 2024.

This presentation will explore the latest trends and current issues to better understand and manage these claims.

The PPO Working Party will host a presentation and discussion of our latest analysis on the quantitative trends of PPOs as at 2023 year-end, and current issues affecting PPO, such as:

• inflation/ASHE
• the new IUA PPO Capitalisation Clause for reinsurance
• Ogden
• mortality
• accounting standards

Target audience and assumed knowledge level: Prior knowledge required.

Speaker and company: 

Justin Thomas, Acorn
Chris Francis, WTW

During the session, we will focus on current hot topics for capital modelling and validation, including:

• the hardest parts of capital modelling: performing effective deep dives on challenging areas like climate change and casualty modelling
• the softer side of capital modelling: engaging with your team and the wider business
• the in-between: how to deliver insightful and efficient analysis of change

Sheena and Tom will bring together different perspectives on capital modelling and validation, from their experience working across a wide range of insurers.

This will be a practical session, with interactive polls, open sharing of case studies, and plenty of time for discussion.

Target audience and assumed knowledge level: No specialist knowledge required.

Speaker and company: 

Sheena Suchak, Lloyd's
Tom Durkin, LCP

Don’t be fooled by what rockstar underwriters and swashbuckling CEOs tell you: the risk function is truly at the heart of a successful and responsible insurance company. In this session we will explore this critical role within the context of current hot topics like AI, ESG and exit planning. As the world of risks evolves and mitigation strategies become more complex we ask: risk – are you ready?

The insurance industry exists to help the world avoid, adapt, and overcome extreme events. Insurers have a duty to operate responsibly towards everyone in society, not just themselves and their shareholders. Increasingly, every decision made by an insurer is scrutinised and every policy is examined, internally and externally.

The risk function has a pivotal role to play, and with every developing risk this role becomes even more prominent. So while the risk function has an established role of supporting a firm’s financial goals, it must extend its portfolio to include:

• fair use of AI in claims handling
• embedding ethical practices throughout the business
• integrating environmental, social and governance considerations
• preparing for exit planning

We will illustrate how these new challenges can be turned into opportunities. We’ll present case studies and best practices from leading insurance companies, demonstrating how running their operations responsibly has positively impacted their bottom line, their reputation and society as whole.

Responsible insurers are shaping the future of the industry, and we have a pivotal role in growing a resilient and ethical insurance ecosystem. Together, we’ll navigate a way through.

Target audience and assumed knowledge level: No specialist knowledge required.

Speaker and company: Julien Masselot, Barnett Waddingham LLP

The quality of your life depends on how well you make decisions. Whether you’re an executive, corporate parent or team lead, making better, faster decisions can help you excel in your career and life, enhancing relationships and achieving personal goals.

In this presentation, we'll delve into a critical skill set that transcends technical expertise: mastering intuition and emotional intelligence for swift decision-making in our rapidly evolving digital age.

Drawing on insights from executive coaching, red team thinking and positive psychology, we’ll explore overcoming decision paralysis, managing uncertainty and trusting yourself to ask curious questions in high-pressure situations.

Target audience and assumed knowledge level: No specialist knowledge required.

Speaker and company: Caroline Maguire, Caroline Maguire Coaching

An annual update from this working group, which provides a detailed overview of claims trends for private car comprehensive insurance cover (injury and property damage). We focus on understanding the continuing inflation of motor insurance losses.

Target audience and assumed knowledge level: No specialist knowledge required.

Speaker and company: Robert Treen, WTW and Jacqui Draper, Government Actuary's Department

Last year, the working party presented the changes Solvency UK will bring about, in addition to the market survey results on the possible impact of these changes. A number of key reforms have now been implemented, and this year the working party aims to cover the observations post implementation, and the next steps to take note of.

Solvency II was implemented at the start of 2016 following 15 years of thorough consultation, however practical issues with its application soon came to light. In addition, the Treasury Select Committee carried out an inquiry on 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 is to gain clarity on the changes and examine the possible market impact of moving from Solvency II to ‘Solvency UK’ on the non-life sector.

Target audience and assumed knowledge level: No specialist knowledge required.

Speaker and company: Amrita Pattni, Guy Carpenter

Kicking off and successfully implementing a pricing and underwriting transformation is difficult, and there are a number of pitfalls insurers fall into as a result.

A number of topics should be considered when striving for success in this area, such as:

• creating a vision and identifying risks early for a successful transformation
• how to get underwriter and IT engagement and support throughout
• resource planning and making sure you're prepared
• how much harmonisation of pricing tools is required prior to deployment
• how a ‘bias to action’ culture can help maintain momentum in transformation

This session will draw from several perspectives within the insurance industry to give a comprehensive view of what good looks like and practical advice on how to set yourself up for success.

We will also include an interactive exercise to demonstrate techniques participants can use to set a vision for and scope out a pricing transformation and/or define the implementation risks. Be prepared to get on your feet and get involved.

Target audience and assumed knowledge level: No specialist knowledge required.

Speaker and company: 

Shyam Bhayani, Aviva
Tom Chamberlain and Jamie Wilson, hyperexponential
Jamie Wilson and Alice Boreman, EY

When Stephen and James first worked together 20 to 25 years ago as actuarial trainees, they were in simpler times. They had the benefit of being able to get involved in the full spectrum of actuarial work, and engage with colleagues right across a broad group of stakeholders. This helped build solid foundations of ‘how insurance works’, which they carry with them to this day.

As pricing has become more complex and more reliant on technology and automation, there is a danger that our people could become too specialised and lose sight of the bigger picture. Arguably, the impacts of this have been seen in recent market results.

Now Stephen and James are working together again. They share an ambition: a best-in-class pricing function combining the advantages of technology and advanced analytical capabilities with the art of deep understanding of how insurance works.

Stephen and James will discuss how to design an effective operating model that helps to unleash the talent in your pricing teams, making reference to real world examples.

Target audience and assumed knowledge level: Assumes basic awareness of personal lines pricing practices, but is expected to resonate across all levels of actuarial practice.

Speaker and company:

Stephen Cox, WTW
James Hillon, Allianz

Analytics and machine learning methods are common in personal lines pricing. Less so in commercial lines, where the application, use and potential is varied and, currently, largely untapped.

Join this session on commercial lines analytics to explore the potential of varied applications, with the aim of significantly enhancing the efficiency and accuracy of processes across the insurance value chain.

During the session, attendees will be:

• introduced to a series of AI and machine learning use cases used to enhance various processes within commercial lines, from data ingestion and pricing to risk management and reserving
• explore some of the methods, research and findings from the Actuarial Science Data Science Working Party and GenAI Working Party
• gain insights from a variety of perspectives, including insurer, MGA, Insurtech and consultancy

Target audience and assumed knowledge level: No specialist knowledge required.

Speaker and company: 

Betty Zhu, Aon
Bijal Patel, Aurora
Karol Gawlowski, Allianz Global Corporate & Specialty

This presentation will involve a comprehensive quantitative analysis of how the AI risks landscape could change drastically in the future.

We will help attendees understand how we can map probability. We’ll also explore the severity of AI-related loss incidents currently and over the next decade, due to risks like data bias, cyber incidents and algorithmic and performance-related issues. Participants will gain insights on how re/insurers can help mitigate some of these risks.

This is a novel approach towards understanding AI risks. Techniques used in different parts of the analysis include text processing, ensemble learning and regression.

Target audience and assumed knowledge level: No specialist knowledge required.

Speaker and company: Mitali Chatterjee, Simon Woodward and Nikhilmon Ou, Swiss Re