Casualty Actuarial Society

Research

2004 Call for Ratemaking Discussion Papers

From: Ratemaking Discussion Paper Chairperson

The Casualty Actuarial Society is again pleased to extend a call for discussion papers on ratemaking topics. As ratemaking is one of the casualty actuary's major areas of expertise, it is important that we foster research and keep our literature current. The Ratemaking Discussion Paper Program is offered to accomplish these goals and to provide additional material for basic and continuing education purposes.

Authors of accepted papers may be invited to present their work at the 2004 Ratemaking Seminar, scheduled for March 11-12, 2004 in Philadelphia, Pennsylvania. 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 prize fund of $2,500 is available for the best papers submitted in response to the call. Both CAS members and non-members are invited to submit proposals for papers.

We welcome all papers on ratemaking topics, but prefer papers that focus on the considerations listed in the CAS Statements of Principles Regarding Property and Casualty Insurance Ratemaking. In addition, we have listed below topics that are of interest as current events and issues or subjects in which various committees of the CAS have expressed a desire to expand the body of available literature.

  1. Use of Credit Scoring
    • Current usage in the insurance market
    • Regulatory concerns and Industry response
    • Methodology for disparate impact analysis
    • Uses of Credit Scoring outside of the banking and insurance industry
  2. Rate of Return for Insurance
    • Impact of weakened stock market on target rates of return
    • Determination of appropriate rates of return
  3. Alternative Risk-transfer Instruments
    • Reflecting the cost of capital in alternative risk transfer arrangements
    • Pricing of risk securitization
    • Ratemaking for Captives
  4. Reinsurance
    • Current best practices in pricing reinsurance contracts
    • Ratemaking considerations of Terrorism Risk
    • Impact of reinsurance costs in pricing primary coverage
    • Changes in Insurance Markets post 9/11
  5. Impact of Shocks to Insurance Markets
    • Profitability Considerations
    • Ratemaking for unanticipated exposures (e.g. mold)
    • Legislative/Court decisions (e.g. diminished value, non-OEM parts)
    • Pricing cycle
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 February 22, 2003, authors should submit proposals for their papers including the suggested title, a short description of the topic(s) to be addressed, the approach that will be taken, and a survey of existing actuarial literature on the subject (title and abstract of a maximum of the five most relevant papers). Proposals should be submitted electronically via e-mail to the Casualty Actuarial Society at office@casact.org.
  2. Acceptance of Proposals
    By March 14, 2003, the Committee on Ratemaking will have made a decision on all proposals. Preference will be given to papers that specifically address the topics listed above. The Ratemaking Discussion Paper Chairperson will contact the authors regarding the acceptance of their proposals.
  3. Monitoring Progress
    A Committee member will be assigned to work with each author to monitor the paper's progress and to provide general guidance in completing the paper within the timeframes. The author will be required to submit an interim draft.

    By June 13, 2003, a completed draft of the author's paper will be submitted to the assigned Committee member for review.

    By August 1, 2003, the Committee member will forward review comments on the draft to the authors.

  4. Completion Date
    By September 5, 2003 the Committee on Ratemaking must receive the completed paper including a 200-word abstract. Each paper will be screened by the Committee to assure its quality of exposition and relevance to the call. The Committee reserves the right to not publish a submission that does not meet an acceptable standard.
  5. Approving the Completed Paper
    By November 28, 2003, authors will have been notified as to the results of the screening process. Accepted papers will be published in the CAS Forum and will be available on the CAS Web Site prior to the 2004 Ratemaking Seminar.

    Authors may be invited to present their papers at the CAS Ratemaking Seminar, scheduled for March 11-12, 2004 in Philadelphia, Pennsylvania. These authors will be contacted in advance of the meeting regarding their presentations.

  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 fund of $2,500 is available for the best paper(s) submitted in response to the call, and will be presented to the author(s) at the Ratemaking Seminar. An independent review committee that will judge the papers anonymously will select the best paper(s). If no paper is considered eligible, the award shall not be made.

    The criteria for evaluation will reflect:

    • Originality of ideas;
    • Understandability of complex concepts;
    • Contribution to the ratemaking literature;
    • Thoroughness of ideas expressed; and,
    • Timeliness and relevance of research.
Papers must be no more than 10,000 words and should be prepared in accordance with the procedures in the "Guide for Submission to CAS Forum" on the CAS Web Site at http://www.casact.org/about/forum. Additional guidance for the preparation of technical papers for publication is provided in the "Guides for the Submission of Papers.htm" in the 2002 CAS Yearbook (pages 337-345) and on the CAS Web Site at http://www.casact.org/about/index.cfm?fa=guides.

In addition to a hard copy of the paper, 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 "Permission to Publish" form allowing the CAS to publish the paper. Authors are encouraged to submit working templates in spreadsheet form for models or methods discussed or developed in their papers and/or PowerPoint presentations incorporating the details of the paper's calculations. The spreadsheets and presentations will be posted on the CAS Web Site along with 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 Ratemaking 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 the Committee on Ratemaking at the CAS Office via e-mail to office@casact.org.

Your participation in this effort to produce new papers will contribute to the written body of knowledge for the CAS and to the success of the 2004 Ratemaking Discussion Paper Program.