GI ROC: Five years on and still rocking
Lis Gibson, chair of the GI Reserving Oversight Committee, reports on the Profession’s response to the Morris Review in relation to GI reserving, facilitated by the General Insurance Reserving Issues Task Force (GRIT) and its successor, the Reserving Oversight Committee (ROC) and looks at the work of GRIT and ROC to date and plans for the future.
GRIT recommendations
The GRIT report, A Change Agenda for Reserving, was finalised in March 2006. It considered how actuaries could improve their approach to reserving. GRIT reached out to the UK profession and developed thoughts and recommendations aimed at facilitating the Profession’s debate on reserving.
The report contained a useful bank of professional knowledge as well as important recommendations for change (see http://www.actuaries.org.uk/sessional/sm20060327.pdf). Arguably the most significant recommendation is the call for greater communication and quantification of uncertainty in reserving.
Of the 34 main recommendations, 11 (those contained in Sections A and F) are the responsibility of the General Insurance Practice Executive Committee (GI PEC) and/ or the Board for Actuarial Standards (BAS). GRIT and ROC are responsible for the other 23 recommendations in B to E and, of these, 20 have now been addressed, at least in part.
GRIT and ROC research and development
A key impact of GRIT and ROC has been the raised profile and level of activity on research and development of actuarial reserving in GI. They have together produced 10 papers and reports from a variety of committees and working parties, which in total have involved over 250 actuaries from nine countries and 40 firms.
A detailed list of GRIT recommendations and the actions undertaken to date to address each recommendation can be found in the ROC section of the Profession’s website at: http://www.actuaries.org.uk/general_insurance/topics/giroc
What is next for ROC?
In the year to come, three working parties will work on:
>> Reserving under Solvency II, led by Kendra Felisky, with the purpose to engage the UK actuarial profession in thinking about the implications of Article 76 of the draft directive, which comments on what a best estimate should be equal to and based on under Solvency II.
>> Effectiveness of reserving methods, led by Steven Fisher. After a successful presentation at GIRO 2008, the working party will continue to analyse the reserving work provided by the 60+ volunteers and, among other work streams, they will begin to investigate how actuaries react to different features of data.
>> Understanding the business better for reserving, led by Hanna Kam, with the purpose of learning from past actuaries’ experiences in reserving, exploring the interaction within the business required for more effective claims reserving, and gathering ideas for practical consideration in reserving specific classes.
In addition to the three ongoing working parties, ROC will be collating its work to date on uncertainty into a sessional meeting paper, which will be presented in November. Over 250 GI actuaries have been involved, which compares with around 650 qualified GI actuaries in the UK. We have enjoyed a high degree of international collaboration with liaison covering the Casualty Actuarial Society in the US, the Institute of Actuaries of Australia, the Society of Actuaries of Ireland, and the Groupe Consultatif as well as individual contributions from actuaries from South Africa, Germany, Hong Kong, Switzerland and France.
We have a fine record of collaboration in the UK GI Profession, epitomised by the collegiate annual event of GIRO. Long may this outstanding tradition continue as we each repay a little more of our debt to the Profession (and yes, we will be asking for more volunteers). The full text of this article can be found at: http://www.actuaries.org.uk/general_insurance/topics/giroc/five_year_update
