Latest Research

New Research Column Launched by Roger M. Hayne

CAS research should not just be for eggheads. That message came across loud and clear from member surveys and focus groups conducted in 1999 by the Research Policy and Management Committee (RPAM) as part of their comprehensive review of CAS research efforts. RPAM's "Review of CAS Research" report, which includes recommendations to increase its effectiveness, is available on the CAS Web Site at www.casact.org/research/rpam/report.htm.

One of RPAM's most significant recommendations is that CAS research committees actively work to make research more accessible to practicing actuaries. The recommendation was a direct result of member feedback stating that simply publishing research in the Forum and Proceedings is not enough. Practitioners want faster and easier access to practical solutions to actuarial problems.

In response to this feedback, RPAM plans to develop a series of articles for The Actuarial Review dealing with breaking research news. This first article will discuss other key themes that emerged from the review of CAS research that will guide us in the future.

The report concluded that the CAS's research effort is fundamentally sound and is world-renowned for its practical emphasis. Papers in CAS publications are practically oriented and often written to solve an immediate problem. At the same time, CAS members are busy and may not have the time to learn and implement these new methods. The result is that new methods, even if they are "better," do not seem to be found in wide use.

If a method is actually better, how can we get it into wider use? The answer is simple—GET THE WORD OUT. The CAS Web Site is an excellent place to find research results, as the Committee on Online Services has focused on making the site a primary resource for research. However, though the Web Site may "pull" you there to get information, we need to utilize "push" technology such as articles in The Actuarial Review and e-mail broadcasts.

Those familiar with CAS research find that it is actually useful and answers important questions. For example, the original research commissioned by the Committee on Theory of Risk (COTOR) dealing with aggregating correlated exposures illustrates how well the process can work. First, COTOR identified a key question: How do you calculate aggregate loss distributions if the various risks are not independent? COTOR then identified a researcher, Shaun Wang, and worked closely with him to achieve the results. The final paper (www.casact.org/cotor/wang.htm) introduces a sound theoretical presentation that is easy to implement. Just to prove this, a spreadsheet was developed (www.casact.org/cotor/FFTCalc.htm) that shows the implementation of Wang's algorithm.

CAS research has historically been "bottom-up," with ideas arising from the committee members and other volunteers. This is in contrast to "top-down" research where topics and efforts are defined by CAS leadership and implemented accordingly. The CAS has been successful in its bottom-up approach but it may not always meet our members' needs. In order to do this, we need your input. If you have an idea for research that needs to be done, please visit the CAS Web Site at www.casact.org/research/suggest.cfm to suggest your idea. And then watch this space—a future article may just have the answer to your problem.