Across the Atlantic
by Paul Klauke
The Casualty Actuaries of Europe (CAE) were fortunate to have CAS President Bob Conger start off its Spring Meeting, which was held on May 9 in London. Bob spent most of his all too brief time with us talking about education. Some members were surprised to hear the average number of exam sittings was 15 for Associates and 18 for Fellows.
The value of the new online courses was discussed and a suggestion was made to advertise in the various international actuarial publications, such as The Actuary in the U.K. Offering a discount in some of the poorer countries was also suggested.
Bob encouraged the continuing expansion of casualty actuarial work beyond ratemaking and reserving; for instance, Australian actuaries are playing major roles in the fields of genetics and resource management. He talked about his recent trip to China, and how the CAS can play a key role supporting the very eager and ambitious students in that vast and developing country.
Simon Pollack, a Fellow of the Institute of Actuaries (U.K.), presented his talk entitled "The Capital Continuum, from Risk to Reward." He immediately received our full attention, suggesting "other things being equal, the ideal level of capital for shareholders is zero." After a lively debate, Simon went on to define capital determination to be "putting a value on risk." He pointed out two views of setting capital: intrinsic (actuarially set) and extrinsic (the "market" value). The actual setting of capital will often be based on an external view of risk: possibly regulatory (16 percent of premium), economic (Value at Risk or VaR), or competitive (market price or rating agencies).
Simon suggested that actuaries take this "given" level of capital and make economic sense of it, using tools such as VaR (the standard in the banking industry), Expected Policyholder Deficit (Moody's and Standard and Poor's), and Utility Theory.
Simon provided some great food for thought, which was heartily partaken, both during the session and at the local pub afterwards.
Before passing the gavel to the new CAE President Alessa Quane, outgoing president Paul Klauke presided over the election of the new vice-president. After all the hanging, dimpled, and pregnant chads were counted and recounted, the dust settled and London-based Christy Olson was declared winner by a landslide. Since the election, however, Olson had a change in professional responsibilities, and has decided to forego serving her term. Doug Lacoss has kindly agreed to step in and serve the members as vice-president in Olson's place.
Vicky Grossack will continue her role as secretary/treasurer for a second year. Grossack has done a great job establishing our Web site, www.casact.org/affiliates/cae/index.htm, and the social network (on the Web site), which is a reference for actuaries who would like to get together with other CAS members while travelling abroad.
The CAS is alive and well across the Atlantic. The next formal meeting of the European Regional Affiliate will be at the General Insurance Research Organizing Committee convention, which will be held October 8-12 at the Hotel New York, Eurodisney, Paris. Tant mieux!