Casualty Actuarial Society

Research

CASACT - 2000 Reserving Call Paper Program

Committee on Reserves Announces 2000 Call for Papers

Emerging Insurance Issues

July 16, 1999

The Casualty Actuarial Society is pleased to extend a call for papers on the topic of "Estimating Liabilities for Emerging Insurance Issues." The purpose of this call for papers is to encourage communication of work being done regarding upcoming areas of concern to actuaries responsible for estimating an insurance company’s loss and loss adjustment expense reserves. Authors of accepted papers may be invited to present their work at the 2000 Casualty Loss Reserve Seminar. In addition, the papers will be published in the CAS Forum and will be available on the CAS Web Site prior to the Seminar. A $1,000 prize will be awarded to the best paper submitted. Both CAS members and non-members are invited to submit proposals for papers.

During the next millennium, actuaries will be increasingly called upon to evaluate insurers’ liabilities relating to potentially volatile exposures with limited relevant historical data available to assist them. In particular, changes in current mass tort issues, the potential for future mass tort issues, and other emerging, non-mass tort-related issues will present significant challenges to the reserving actuary.

Reserving papers relating to (though not limited to) the following list of topics are being sought:

  • Y2K, a.k.a. the Millennium Bug. How should Y2K losses be modeled? When should Y2K loss reserves be accrued? Should they be accrued at all? How should Y2K-related litigation costs (i.e., related to insurers seeking to deny coverage) be modeled? Discussions relating to the different types of Y2K claims and coverage triggers are also being sought.
  • Tobacco. Should tobacco-related loss reserves be established? If so, how? How can tobacco-related litigation costs (i.e., related to insurers seeking to deny coverage) be estimated?
  • Internet Liability. What type(s) of Internet-related liability face an insurer? How can these costs be estimated?
  • Allocation of Mass Tort Claim Costs. What are the major issues to be considered when trying to allocate mass tort claim costs among policyholders, insurers and reinsurers? How have these issues been resolved in the various allocation rulings in key mass tort cases?
  • What Makes a Mass Tort? Specifically, what makes some mass torts sizzle (like asbestos and pollution claims) while others only fizzle (like electromagnetic field and repetitive stress injury claims)? What new types of mass torts are likely to threaten the insurance industry in the future? What issues surround them, and how can they be modeled?
  • Currently and Soon-to-be Emerging Issues. The shift to a global economy, modernization and consolidation of financial services, and insurance deregulation are a few of the many changes taking place that will likely impact current types of claims and possibly result in new ones. How can the actuary quantitatively address the impact of these issues when modeling current - and future - types of losses? What other issues may soon be facing the insurance industry (e.g., over the next decade) and how should the reserving actuary address them?
  • The Coverage Dispute Tidal Wave. One thing many emerging issues have in common is that they will likely result in significant coverage dispute litigation. How can the actuary model reserves for these coverage dispute litigation costs?
  • Niche Marketing/Competition. Increasing pricing and profitability pressures will undoubtedly lead to increased niche-market writings and careful reviews of reserve adequacy by regulators and rating agencies alike. How can actuaries estimate the impact on the company’s reserves of new types of business and/or niche markets with limited data that company management started writing, believing it to be profitable?
  • Enterprise Risk Management. Companies are becoming more and more interested in putting all their eggs in one company basket - including some risks not previously underwritten by insurers. How can the reserving actuary estimate liabilities for these new types of policies, which may include a package/multitude of exposures and both new and unknown types of losses?

Call Paper Timetable
Timely submission of the discussion papers is critical to the success of the call. The procedures and timetable enumerated below will apply.

  1. Deadline for Proposals
    By November 1, 1999, authors should submit proposals for their papers including the title, a short description of the topic(s) to be addressed, and the approach that will be taken. Proposals should be submitted to:

    Casualty Actuarial Society
    1100 North Glebe Road, Suite 600
    Arlington, VA 22201
    Attn: Committee on Reserves

    Proposals may also be submitted by e-mail to office@casact.org.
  2. Acceptance of Proposals
    By November 15, 1999, the Committee will make a decision on all proposals. The number of accepted proposals may be limited. The Committee will contact authors regarding their proposals.
  3. Monitoring Progress
    A Committee member will be assigned to work with each author to monitor the paper’s progress and provide general guidance in completing the paper. By mutual agreement, the author and the assigned Committee member will establish a schedule for the production of interim drafts.

    By March 15, 2000, a first draft of the completed paper will be submitted to the assigned Committee member for review.

    By April 14, 2000, all comments on the first draft will have been forwarded to the author.
  4. Completion Date
    By June 1, 2000, the Committee on Reserves must receive the completed paper and a 200-word abstract for their review. Each paper will be screened by the Committee to assure its quality of exposition and relevance to the call. The Committee may require further rewriting of the paper to bring it to an acceptable standard.
  5. Approving the Completed Paper
    By July 14, 2000, all authors will have been notified as to the results of this screening process. Accepted papers will be printed in the CAS Forum and will be available on the CAS Web Site prior to the 2000 Casualty Loss Reserve Seminar.

    Authors may be invited to present their papers at the CLRS, scheduled for September 18-19, 2000, in Minneapolis, Minnesota.
  6. Prize Competition
    All papers submitted and accepted in response to the call and meeting the minimum standards established by the Committee will be included in the prize competition. A prize in the amount of $1,000 will be awarded to the best paper submitted in response to the call, and will be presented to the author at the CLRS. The best paper will be selected by an independent review committee that will judge the papers anonymously. The criteria for evaluation will reflect:
  • Originality of ideas
  • Clarity of presentation
  • Contribution to the literature on reserving
  • Thoroughness of analysis

Papers must be no more than 10,000 words and should be prepared in accordance with the procedures outlined in the "Guide for Submission to CAS Forum". Additional guidance for the preparation of technical papers for publication is provided in the "Guides for the Submission of Papers". In addition to a hard copy of the paper, the authors will be required to provide an electronic copy of the paper on diskette or by e-mail, and will be asked to sign a "Release and License" form allowing the CAS to publish the paper.

It is hoped that the authors will also submit their papers for publication in the Proceedings in accordance with the procedures in the Yearbook. However, acceptance of a discussion paper for this call does not guarantee its acceptance for publication in the Proceedings.

The Committee on Reserves looks forward to receiving proposals in response to the call, and is happy to respond to inquiries from interested parties. Questions may be addressed to Steven Visner or Deborah Rosenberg at their CAS Yearbook addresses.