Actuaries Abroad Happy 150th Birthday to the Institute of Actuaries! Let the festivities begin!

by Kendra Felisky-Watson

Well, actually the celebrations started with the International Congress of Actuaries meeting in June in Birmingham. Almost a thousand actuaries attended from 60 countries ranging from Argentina to Zimbabwe. Unfortunately, only about 50 general insurance actuaries attended, but the CAS was ably represented by Mavis Walters and Steven Lehmann. A special treat was a concert by the City of Birmingham Symphony Orchestra, which played a fanfare called "Certum ex Incertis" (the Institute's motto) written especially for the Institute by Judith Weir. Another highlight of the Congress was the morning presentation at which representatives from different countries gave a history of the actuarial profession in their respective countries. Unfortunately, the weather was a bit wet during the conference. Many attendees and guests appreciated the free Tillinghast umbrellas.

The International Congress also premiered an actuarial exhibition, assembled by the Institute of Actuaries, which is now in residence at Staple Inn. The exhibition covers the history of the Institute from 1848, the founding members, the development of actuarial science over the years, and the four main practice areas of actuaries in the U.K.: mortality, pensions, investments and general insurance (the newest area). In addition, there is an interactive PC computer "game" where you can pretend to be the appointed actuary of a life insurance company, declare bonuses, and see if the company goes insolvent.

A wide variety of other celebrations took place throughout July, including a large garden party in nearby Grey's Inn and another party to celebrate the 75th anniversary of their first female qualified actuary.

Estimating Reinsurance Bad Debt

An interesting paper has been written discussing how to estimate a reinsurance bad debt provision for Lloyd's syndicates. For year-end 1998, all actuarial opinions on syndicates required by Lloyd's (not the U.S. Trust Fund opinions) must include consideration by the signing actuary of the provision for reinsurance bad debt. This paper presents both a theoretical and a practical approach. The theoretical approach assumes that all the data, time and money to perform a perfect analysis is available. The practical approach takes into account the more likely situation of insufficient data, short time scales, and limited resources. The theoretical approach makes for very interesting reading; however, many feel that the practical approach still could be more simplified. The paper very sensibly presents an approach, not a prescribed methodology, so that the actual process can be modified for the materiality of the estimated reserves.

Realistic Disaster Scenarios

Continuing on the Lloyd's theme, this is the third year Lloyd's has required syndicates to present ten Realistic Disaster Scenarios (RDSs) in their annual business plans submitted to Lloyd's. These RDSs are a standard measure that enables syndicates to be compared to each other and also with global market data. They also enable consideration of the impact of disaster on reinsurers and how exposure to a given event could aggregate. The need for these RDSs was brought about by the LMX spiral, which only had all the risk concentrated back into few syndicates.

CAE Meets

The first meeting of the newest CAS affiliate Casualty Actuaries in Europe took place in Zurich in April. About 35 actuaries attended, including CAS members, Institute of Actuaries members, Swiss actuarial students, and others in the industry. The topics presented included a discussion of catastrophic insurance risk which has been transferred to the capital market. The next meeting will take place in conjunction with the joint General Insurance Study Group and ASTIN conference in Glasgow.

This first-ever joint GISG/ASTIN conference will take place October 7-10 and is open to any general insurance actuary. While the ASTIN part of the conference means that many technically challenging papers will be presented, the GISG part of the conference means that interesting practical discussions will occur as well as a thorough examination of the Glasgow whisky trail!

A Final Note

The first joint CAS and Institute of Actuaries one-day conference in London will take place next June. It will cover topics that are of joint concern to CAS members and Institute members who either work in the London Market or have a connection with the London Market. CAS members in Europe will also find it interesting. While the date is not set yet, you might want to book your Wimbledon tickets now!