How Are We Doing on the Centennial Goal?
By John J. Kollar
This column provides a quick summary on progress toward the CAS Centennial (2014) Goal.
In case you have not seen it, here it is:
The CAS will be recognized globally as a leading resource in educating casualty actuaries and conducting research in casualty actuarial science. CAS members will advance their expertise in pricing, reserving and capital modeling, and leverage their skills in risk analysis to become recognized as experts in the evaluation of enterprise risks, particularly for the property and casualty insurance industry.
I will address efforts in many areas within the CAS intended to move our organization towards achieving our aspirations.
The CAS Board approved adding to the syllabus the recently completed reserving text, “Estimating Unpaid Claims Using Basic Techniques.” This text replaces the several papers previously used and provides a more coherent treatment of loss reserving. It removes much of the nation-specific material making it an international treatment of the subject. The CAS Board has also commissioned a ratemaking text that is scheduled to be completed by the time this edition of the Actuarial Review is published. As with the reserving text, it is intended to be a comprehensive and coherent treatment of the subject that will have international applicability. Working with other actuarial organizations and the academic community, the Syllabus Committee may seek to commission additional syllabus material as the need is identified.
The Syllabus Committee will be reviewing international material included in the syllabi of other actuarial organizations around the world in 2009 for possible inclusion in the restructured 2011 syllabus. It is even possible that the committee may eventually extend this review beyond actuarial material that is written in English. The Syllabus Committee has a charge to expand the focus of the material beyond its traditional insurance focus to a much broader risk management perspective.
Members of the CAS and SOA are evaluating the Canadian Institute of Actuaries FEM system (Flexible Education Methods—exam credits for university courses) and other alternative educational and testing methods. The vision is to have the best possible syllabus material delivered in the most effective and efficient fashion.
Research & Development
The research committees have been working with the Strategic Planning Committee and CAS practitioners and interested parties in the ever-expanding area of enterprise risk management (ERM) to identify long-term research needs, including critical new areas for research. They are also promoting relationships within the global actuarial community to conduct international research projects that address issues of interest to all actuaries, risk professionals, academics, and the general public.
Some key issues include climate change and the global financial crisis, which could be characterized as a failed ERM process. Partners in the global actuarial community include the Joint Risk Management Section; Enterprise Risk Management Institute International (ERM-II); Institute of Actuaries in Australia; The Actuarial Profession (U.K.), including their General Insurance (P&C here in the U.S. and Canada) Section known as GIRO; and the ASTIN section within the International Actuarial Association (IAA). Variance, the CAS’s refereed journal, continues to publish a number of very thought-provoking new research papers.
The research and professional education committees are focused on integrating research into actual practice through basic and continuing education offerings.
Continuing Professional Development (CPD)
Because of the increase in hours required to satisfy the qualification standards for practice in the U.S., the CAS Program Planning Committee has added subject tracks to the Spring and Annual meetings to provide more CPD opportunities. The growing interest in predictive modeling, ERM, and various modeling courses have also contributed to this demand.
One concern for the CAS Board involves a possible threat to the reputation of property/casualty actuaries from practicing members who, although having completed their exams, have not kept up-to-date their professional expertise in the traditional practice areas of ratemaking and reserving. The board has formed a task force to focus on technical excellence, and to identify ways to address this challenge. One possibility under consideration is to grant certificates for completing specified work in a particular subject.
As you have seen, the CAS is exploring the idea of requiring continuing professional education for all of our practicing members. Webinars have proven to be an effective alternative vehicle for delivering continuing education, and the CAS is offering more of them in response to increased employer-focus on expense control and greater demand on members’ time.
Recently CAS meetings and seminars have featured speakers from actuarial organizations outside North America to help us understand how actuaries in other countries address issues such as loss reserving. Other actuarial organizations have reciprocated, and our leaders have made presentations at GIRO and to the general insurance actuaries in Australia. These initiatives benefit CAS members in education, research, and CPD programs by helping the CAS build a leadership role on the international general insurance stage. This new role may also lead to employment opportunities for CAS members who wish to practice in locations other than the U.S. and Canada.
The international committees have identified appropriate training topics and provided more training opportunities, both seminars and Webinars, for our growing number of members outside of North America. They have been working with the Course on Professionalism (COP) Committee to develop cost-effective professionalism courses that include appropriate local material.
In response to Mutual Recognition invitations to the CAS, the Education Policy Committee is exploring the possibility of expanding this program to include members of the actuarial organizations in India and South Africa. Adopting a Mutual Recognition program would allow CAS members to more easily practice in those countries.
An International Leadership Team, which reports to the CAS Board, has been established to address international issues, such as determining the CAS position on important issues arising at the IAA. The team also monitors and manages international-related expenses as fiduciaries of the CAS.
I wrote about a possible ERM designation for the CAS in my last column. This initiative continues to develop. (Editor’s note: See pages 2 and 18 for more on ERM.)
Leadership Development Committee
This board-established committee has begun to develop a program designed to identify and nurture potential volunteer leaders who show promise for taking on increased responsibility. These potential leaders may determine the future success of the CAS, and the committee wants to ensure that the CAS will give these future leaders ample opportunities to develop the skills they will need to continue the prominent global role the CAS plays in casualty actuarial science.
The current annual budget of the CAS is approximately $8.4 million. In order to control the pressure on our annual dues and registration fees from expanded services and meeting-related costs within the CAS, the board has established a task force to explore alternative ways of raising funds. These funds could also be used for commissioning new syllabus material and conducting research.
The Road Ahead
In summary, there is significant activity within the CAS—both by volunteers and our well-qualified CAS office staff—that is designed to move the organization ahead as it approaches and reaches its 100th anniversary. These initiatives are being recognized by other actuarial organizations within and outside North America. I believe we are heading in the right direction, but we need to continue pursuing these initiatives if we are going to achieve the Centennial Goal. Are you on the team?
The author would like to thank Chris Carlson, CAS Board Chairman, and Roger Hayne, CAS President-Elect, for their valuable input in producing this update.