Requests for Proposals

The CAS Research Council is issuing a Request for Proposals (RFP) to generate a brief which discusses potential unintended impacts on protected classes other than race or ethnicity when mitigating racial bias in insurance rating.

Casualty Actuarial Society (CAS)

The CAS was organized in 1914 as a professional society for the promotion of actuarial and statistical science as applied to insurance other than life insurance, such as automobile, liability other than automobile, workers compensation, fire, homeowners, commercial multiple peril, and others. Such promotion is accomplished by communication with those affected by insurance, presentation and discussion of papers, attendance at seminars and workshops, collection of a library, research, and other means. The membership of the CAS includes over 8,600 actuaries worldwide, employed by insurance companies, industry advisory organizations, national brokers, accounting firms, educational institutions, state insurance departments, the federal government, and independent consultants.

The CAS Research Council

The CAS Research Council was formed in 2021 to prioritize the research needs of the general insurance actuarial community. This work will augment the existing work of standing research working groups which focus on specific practice areas like ratemaking, reserving, reinsurance, and risk analysis. The operational oversight of projects will be designated to a project oversight group (POG) made up of CAS staff and volunteers.

Research Problem Description

The insurance industry has raised questions about potential racial inequities, and many states have looked to create regulations limiting attributes insurance carriers may include within their rating algorithms. Rating attributes that have been under scrutiny recently include, but are not limited to, credit-based insurance scores, age, gender, geography, home ownership, motor vehicle records, and marital status due to their direct or perceived correlation with a protected class. While the intent of these measures is to minimize unfair impacts on certain protected classes, the true implications of removing variables to minimize potential bias in a rating algorithm remain unclear. Moreover, what are the implications of acting based upon a single protected class only? Could bias-mitigation along a given protected class leave some intersections unfairly impacted? A tangible example could be the removal of credit rating from an insurance rating algorithm that benefits a certain class, but adversely impacts older individuals who have built up better credit scores on average.

The CAS is looking for a document that discusses the potential unintended impacts on protected classes when mitigating bias in rating plans such as private passenger auto and homeowners insurance. Specifically, we are looking at the impact of prohibition of specific insurance rating variables. In particular, the goal of this document will be to show the potential impacts on various classes (e.g., age, race, gender, etc., intersections of those classes, etc.) and not focus on the impact to any single class. Ideally this paper will utilize actual data to show real world examples that would more likely be seen when implementing bias reduction techniques. Where such data is not available, theoretical or simulated data may be used if it can be demonstrated that the simulations are a reasonable facsimile of real-world conditions.

Project Requirements

The end product of the research should be a paper, saved as (or converted to) a Microsoft Word file. The length should be sufficient to give meaningful, practical guidance to practitioners in a way that is concise yet complete. This typically means a paper of 15-50 pages. Those page counts should be regarded as rough guidelines only.

Actuarial/statistical methods used, such as GLMs, should have sound foundations rooted in established principles. A method’s output should be explainable to insurance industry decision makers who may not have the experience or education of an actuary. Given the subject matter of this paper, the results could be shared beyond the insurance industry and, therefore, should be communicated in a clear and concise manner that is accessible to the general public.

Any accompanying code examples will be shared on the CAS GitHub site (https://github.com/casact). All material on GitHub is released under the Mozilla Public License, version 2.0 (https://www.mozilla.org/en-US/MPL/2.0/).

Proposal Requirements

Proposals should include a clear outline of the work that will be performed and the time frame in which it will be performed (including key dates). The proposal should be accompanied by the resumes of the researcher(s), indicating how their background, education, and experience bear on their qualifications to undertake the research.

The CAS contract will be awarded to the respondent who - in the judgment of the Research Council and entirely based on their written proposal - is best able to perform the work as specified herein. If the committee determines that no proposal meets the requirements of the RFP, then no contract will be awarded.

Receipt of proposals will be acknowledged in a timely manner. Respondents who are not awarded the contract will be informed shortly thereafter.

Interested researchers should submit their proposals and any questions to:

Mallika Bender, DEI Staff Actuary
Casualty Actuarial Society
mbender@casact.org

Timeline

Interested parties are welcome to submit questions about the RFP. All questions and responses will be circulated to all who submit a proposal.

Compensation

Compensation to researchers will be commensurate with the time required to carry out the work. Respondents should include an estimate of cost in their proposals. Total cost should not exceed $45,000.

Presentation, Ownership and Publication of Report

As a condition of selection, the CAS requires that all right, title, and interest, including copyright and patent, in and to the report be owned by the CAS. The selected researcher/research team must sign a formal research agreement that assigns all such rights to the CAS. In any publication of the report, the researcher(s) will receive appropriate credit with regard to authorship. The CAS may publish the report in its entirety, or any sections thereof, in any format and medium as it finds fit, including but not limited to CAS publications, and electronic versions such as on its Web site or physical storage media.

The researcher(s) should make every effort to be available to present the report at a CAS meeting or seminar.

The CAS Research Council is issuing a Request for Proposals (RFP) to generate a brief that discusses issues and best practices as relates to emerging regulation/statutes surrounding algorithmic bias.

Casualty Actuarial Society (CAS)

CAS is the world’s only actuarial organization focused exclusively on property and casualty risks.  Visit https://www.casact.org/about for more information.

The CAS Research Council

CAS formed the Research Council in 2021 to help prioritize the research needs of the general insurance actuarial community.

Research Problem Description

Over the past several decades, various regulations and statutes have attempted to (directly or indirectly) address the potential for algorithmic bias in insurance pricing, with a particular focus on the potential impacts any such biases may have on protected classes.  The scrutiny of regulations and statutes has up-ticked in the 2020s with one of the most well-known examples being Colorado SB21-169 and subsequent regulatory activity.  At the same time, the range of algorithmic capabilities is increasing as quickly or more so – as illustrated by the virality of ChatGPT starting in late 2022.  These compounding developments are challenging industry stakeholders to quickly understand, achieve, and illustrate compliance with complex sets of guidelines that are emerging. The CAS is soliciting research proposals for a practical paper to help actuaries understand and respond to this evolving regulatory landscape amid the advancing technological developments.

Project Requirements

CAS is open to however few/many pages are necessary to sufficiently address the research problem but 20-40 are typical.  The paper should present technical information with sufficient clarity for stakeholders without actuarial/STEM backgrounds to find them accessible and useful.  Any accompanying code examples will be shared on the CAS GitHub site (https://github.com/casact). All material on GitHub is released under the Mozilla Public License, version 2.0 (https://www.mozilla.org/en-US/MPL/2.0/).

Proposal Requirements

Proposals should include a clear outline of the work that will be performed and the time frame in which it will be performed (including key dates). The proposal should be accompanied by the resumes of the researcher(s), indicating how their background, education, and experience bear on their qualifications to undertake the research.  The CAS contract will be awarded to the respondent who - in the judgment of the Research Council or its designee and entirely based on their written proposal - is best able to perform the work as specified herein. If the committee or designee determines that no proposal meets the requirements of the RFP, then no contract will be awarded.

Receipt of proposals will be acknowledged in a timely manner. Respondents who are not awarded the contract will be informed shortly thereafter.

Interested researchers should submit their proposals and any questions to:
Mallika Bender, FCAS, MAAA
DE&I Staff Actuary
Casualty Actuarial Society
mbender@casact.org

Timeline

Proposals should be submitted within four weeks of this announcement.  A selection will be made by October 30th at the latest.  Interested parties are welcome to submit questions about the RFP. All questions and responses will be circulated to all who submit a proposal.  CAS may engage interested parties during the review period to further discuss proposal.

Compensation

Respondents should include requested funding (if any) and attribution to corresponding research activities in the proposal. Total cost should not exceed $50,000.

Presentation, Ownership and Publication of Report

As a condition of selection, the CAS requires that all right, title, and interest, including copyright and patent, in and to the report be owned by the CAS. The selected researcher/research team must sign a formal research agreement that assigns all such rights to the CAS. In any publication of the report, the researcher(s) will receive appropriate credit with regard to authorship. The CAS may publish the report in its entirety, or any sections thereof, in any format and medium as it finds fit, including but not limited to CAS publications, and electronic versions such as on its Web site or physical storage media.

The CAS is issuing a Request for Proposals (RFP) for a research paper which studies and discusses climate-related actuarial considerations for general insurers in Asia, Africa, and/or South and Central America.

About the Casualty Actuarial Society (CAS)

The Casualty Actuarial Society (CAS) is a global leader in general insurance, with a growing membership of over 10,000 members around the world. Our members are experts in property and casualty, reinsurance, finance, risk management, and enterprise risk management. Professionals educated by the CAS empower businesses and governments to solve problems and make well-informed strategic, financial, and operational decisions. To continuously expand and enhance the skills of the modern actuary, the CAS supports research in a variety of areas. The vast array of CAS publications encompass the theoretical aspects of actuarial science as well as the practical business facets of building the profession in general insurance. The CAS is an active and full member of the International Actuarial Association.

The CAS Research Council

The CAS Research Council was formed in 2021 to prioritize the research needs of the general insurance actuarial community. This work augments the existing work of standing research working groups which focus on specific practice areas like ratemaking, reserving, reinsurance, and risk analysis. The operational oversight of projects is designated to a project oversight group (POG) made up of CAS staff and volunteers.

Research Problem Description

Climate-related risks are a growing factor for general insurers globally. Actuaries and other investment and risk management professionals are continually looking to strengthen methods for calculating, predicting, and navigating these risks.

The research will investigate key considerations for actuaries supporting their companies in climate-related risk identification and management and may include approaches, models, case studies, and lessons learned. Potential topics include, but are not restricted to:

• Specific modeling relating to region-specific climate and catastrophe events.
• Approaches to consider for scenario analysis of climate risk impact on general insurers.
• Models and challenges related to long-range modelling and forecasting for general insurers. For example, a multidecadal model linking general insurance costs to future Intergovernmental Panel on Climate Change (IPCC) climate scenarios.
• Emerging climate risks and their impacts on both vulnerable & resilient populations.
• Impact of compound (multi-peril and/or multi-hazard) events on risk management frameworks.
• Emerging climate-related regulation and disclosure requirements in target markets. For example, the effects of disclosure requirements on potential litigation against general insurers or on the risks they insure.
• Resiliency and mitigation/adaption models for risk management. For example, economic and/or insurable risk impact from changes in building materials.
• Decarbonization and its relationship to the insurance industry.
• Techniques for greenhouse gas emissions measurement.
• Use of alternative risk transfer methods and sources to address general insurance risk from climate change. For example, how general insurers might partner with investors with heightened risk appetite for systemic risk.
• Vulnerable populations, protection gaps, and how insurance solutions can help improve outcomes. For example, measurement of risk to crop yields and illustration of financial risk products which may mitigate such risks.

Proposed hypotheses and research designs should be new and not duplicative of existing publicly available materials. Projects that incorporate a regional or multi-country focus are encouraged.

Project Requirements

The end product of the research should be a paper, in English, saved as (or converted to) a Microsoft Word file. The length should be sufficient to give meaningful, practical guidance to practitioners in a way that is concise yet complete. This typically means a paper of 20-50 pages. Those page counts should be regarded as rough guidelines only.

Where actuarial/statistical methods are used, they should have sound foundations, rooted in established principles. With that understood, the techniques within a method should be intelligible to an actuary working general insurance. Moreover, a method’s output should be explainable to insurance industry decision makers who may not have the experience or education of an actuary.

We understand that this brief may rely on technologies which are generally understood within IT and engineering circles. Authors should understand that although actuaries are technically literate, they are not necessarily fluent in all the technologies that a paper might present, and therefore any technologies discussed should be introduced in the paper.

Proposal Requirements

A complete proposal will include the following items:

• The name and contact information of the lead researcher/primary contact for the project;
• The detailed hypothesis to be addressed in the research paper and why it is significant for actuarial professionals and how it will expand current knowledge on the topic. Please also describe how this work is new and not duplicative of existing material;
• An outline of the approach to be used (examples: literature reviews, models, etc.). Details should be given regarding the techniques to be used, material to be consulted, and possible limitations of the analysis;
• Resumes of the researcher(s) indicating how their education, skills, and experience are related to their qualifications to undertake the research;
• A project timeline with key milestones that also includes submission of a draft report to the CAS for questions and comments to be considered and addressed in the preparation of the final product. Please plan for up to six weeks to receive feedback on your draft report from the CAS in your timeline.
• A detailed budget of no more than $40,000 USD that includes estimated numbers of hours per research team member and their associated hourly rates and any other direct or indirect costs (technology, materials, etc.). The budget should be reasonable in relation to the design of the research project.

Timeline and selection

The selection of a proposal is conditioned upon and not considered final until a Letter of Agreement is executed by both the CAS and the researcher.

The CAS will award to the respondent who - in the judgment of the CAS and entirely based on their written proposal - is best able to perform the work as specified herein. The CAS reserves the right to not award a contract for this research. Reasons for not awarding a contract could include, but are not limited to, a lack of acceptable proposals or a finding that insufficient funds are available. The CAS also reserves the right to redirect the project as is deemed advisable.

General Conditions

As a condition of selection, the CAS requires that all rights, title, and interest, including copyright and patent, in and to the report be owned by the CAS. The selected researcher/research team must sign a formal research agreement that assigns all such rights to the CAS. In any publication of the report, the researcher(s) will receive appropriate credit with regard to authorship.

The CAS may publish the report in its entirety, or any sections thereof, in any format and medium as it finds fit, including but not limited to CAS publications, and electronic versions such as on its website or physical storage media.

The CAS may choose to seek public exposure or media attention for the research. By submitting a proposal, you agree to cooperate with the CAS in publicizing or promoting the research and responding to media requests.

The researcher(s) should make every effort to be available to present the report at CAS meetings or seminars (up to one in person in the U.S., two in the region covered by the research, and two virtual).

Any accompanying code examples will be shared on the CAS GitHub site (https://github.com/casact). All material on GitHub is released under the Mozilla Public License, version 2.0 (https://www.mozilla.org/en-US/MPL/2.0/).

Contact Information

Interested researchers should submit their proposals and any questions to:

Joyce Warner
Chief Business Officer
Casualty Actuarial Society
jwarner@casact.org

The CAS Research Council is issuing a Request for Proposals (RFP) to assess ways in which telematics and usage-based insurance technologies/data can either increase or decrease the potential for racial bias within insurance rating.

Casualty Actuarial Society (CAS)

The CAS was organized in 1914 as a professional society for the promotion of actuarial and statistical science as applied to insurance other than life insurance, such as automobile, liability other than automobile, workers compensation, fire, homeowners, commercial multiple peril, and others. Such promotion is accomplished by communication with those affected by insurance, presentation and discussion of papers, attendance at seminars and workshops, collection of a library, research, and other means. The membership of the CAS includes over 9,000 actuaries worldwide, employed by insurance companies, industry advisory organizations, national brokers, accounting firms, educational institutions, state insurance departments, the federal government, and independent consultants.

The CAS Research Council

The CAS Research Council was formed in 2021 to prioritize the research needs of the general insurance actuarial community. This work will augment the existing work of standing research working groups which focus on specific practice areas like ratemaking, reserving, reinsurance, and risk analysis. The operational oversight of projects will be designated to a project oversight group (POG) made up of CAS staff and volunteers.

Research Problem Description

As the insurance industry has raised questions about potential racial inequities, telematics and usage-based-insurance have been postulated as a more appropriate path to fair & equitable risk-based pricing within personal auto insurance. The CAS is requesting research to both test this hypothesis and provide a balanced view into telematics and usage-based insurance. Submitted research should discuss the potential of telematics to mitigate, create, and/or amplify bias by addressing questions such as:  

• How do the results of telematics rating variables* compare to those of traditional rating variables suspected of racial inequities, such as credit-based insurance score, when tested for racial bias?
• What additional benefits does telematics/UBI bring to insurance as it relates to protected classes, such as risk mitigation, increased availability of insurance, etc.?
• Is there inherent bias within the barriers of entering a telematics/UBI program, such as the availability of compatible phones/vehicles, take rate, completion rate, etc.?
• Do telematics rating variables run the risk of serving as a proxy for other variables, such as occupation, education, age, etc.?
• While this paper focuses on racial bias, are there any other potential interactions from telematics, e.g. impact to other protected classes?

Common telematics variables include speed, acceleration, hard breaking, hard cornering, miles driven, time of day/week, phone use while driving, and driving geography. For the purpose of this research, the scope can include these variables but is not limited to them.

Project Requirements

The end product of the research should be a paper, saved as (or converted to) a Microsoft Word file. The length should be sufficient to give meaningful, practical guidance to practitioners in a way that is concise yet complete. This typically means a paper of 15-50 pages. Those page counts should be regarded as rough guidelines only.

Where actuarial/statistical methods are used, they should have sound foundations, rooted in established principles. With that understood, the techniques within a method should be intelligible to an actuary. Moreover, a method’s output should be explainable to insurance industry decision makers who may not have the experience or education of an actuary.

Methods should have sound mathematical foundations, rooted in established principles of mathematical statistics or predictive modeling. With that understood, the techniques within a method should be intelligible to an actuary working in Property & Casualty insurance pricing and should not pre-suppose extensive familiarity with advanced topics in those fields. Moreover, methods and processes should be explainable to insurance industry decision makers who may not have the experience or education of the actuary implementing the testing or integration of industry benchmarks.
The paper should not make any specific recommendations with regard to public policy.

Proposal Requirements

Proposals should include a clear outline of the work that will be performed and the time frame in which it will be performed, including key dates.

The proposal should be accompanied by the resumes of the researcher(s), indicating how their background, education, and experience bear on their qualifications to undertake the research.

The CAS contract will be awarded to the respondent who is best able to perform the work as specified herein. If the group determines that no proposal meets the requirements of the RFP, then no contract will be awarded.

Receipt of proposals will be acknowledged in a timely manner. Respondents who are not awarded the contract will be so informed shortly thereafter.

Interested researchers should submit their proposals and any questions to:

Mallika Bender, DE&I Staff Actuary
Casualty Actuarial Society
mbender@casact.org
(302) 438-3465

Timeline

Proposals should be submitted by October 15th. Interested parties are welcome to submit questions about the RFP. All questions and responses will be circulated to all who submit a proposal.  CAS may engage interested parties during the review period to further discuss proposal.

Compensation

Compensation to researchers will be commensurate with the time required to carry out the work. Respondents should include an estimate of cost in their proposals. Total cost should not exceed $45,000.

Presentation, Ownership and Publication of Report

As a condition of selection, the CAS requires that all right, title, and interest, including copyright and patent, in and to the report be owned by the CAS. The selected researcher/research team must sign a formal research agreement that assigns all such rights to the CAS. In any publication of the report, the researcher(s) will receive appropriate credit with regard to authorship. The CAS may publish the report in its entirety, or any sections thereof, in any format and medium as it finds fit, including but not limited to CAS publications, and electronic versions such as on its Web site or physical storage media.

The researcher(s) should make every effort to be available to present the report at a CAS meeting or seminar.

The CAS initiated research on several topics related to potential bias in insurance pricing as part of its Approach to Race and Insurance Pricing in 2021 and 2022. This resulted in a series of four papers, which were published in March 2022. The research requested here may be included in the second phase of that research series.

The CAS is issuing a Request for Proposals (RFP) for a research paper which studies and discusses the actuarial considerations associated with IFRS-17 implementation for general insurers in Asia.

1. About the Casualty Actuarial Society (CAS)

The Casualty Actuarial Society (CAS) is a global leader in general insurance, with a growing membership of nearly 10,000 members around the world. Our members are experts in property and casualty, reinsurance, finance, risk management, and enterprise risk management. Professionals educated by the CAS empower businesses and governments to solve problems and make well-informed strategic, financial, and operational decisions. To continuously expand and enhance the skills of the modern actuary, the CAS supports research in a variety of areas. The vast array of CAS publications encompass the theoretical aspects of actuarial science as well as the practical business facets of building the profession in general insurance. The CAS is an active and full member of the International Actuarial Association.

2. The CAS Research Council

The CAS Research Council was formed in 2021 to prioritize the research needs of the general insurance actuarial community. This work augments the existing work of standing research working groups which focus on specific practice areas like ratemaking, reserving, reinsurance, and risk analysis. The operational oversight of projects is designated to a project oversight group (POG) made up of CAS staff and volunteers.

3. Research Problem Description

The implementation of IFRS-17 is an emerging focus area for general insurers in the Asia region. China, Hong Kong, Malaysia, Singapore, and Taiwan are all presently moving to this new accounting standard. Actuaries and professionals in accounting and information technology are working together in new ways to assemble and report in accordance with this new standard.

The research will investigate key considerations for actuaries supporting their companies in IFRS-17 reporting and may include risks and opportunities for professionals and general insurance companies; as well as approaches, case studies, and lessons learned in implementing the standard. Potential topics include, but are not restricted to:

• Use of Premium Allocation Approach (PAA) vs. General Model (GM).
• Case studies on PAA eligibility approaches.
• Explore the actuarial role in Onerous Contract identification and loss component calculation.
• For those under the GM, case studies in actuarial work in updating the Contractual Service Margin (CSM).
• Research on change in Key Performance Indicators (KPIs), and actuarial influence on them.
• Reconciliation of IFRS 17 statements against prior accounting rules, regulatory accounting (if different) and internal management reports.
• What are best practices for post-implementation reviews?
• What changes to data quality will be brought about by IFRS-17 implementation?
• What might a movement analysis between IFRS-17 and the current standard show?
• What impact will IFRS-17 have on system efficiency?
• How will IFRS-17 affect the construction and display of management information?

Proposed hypotheses and research designs should be new and not duplicative of existing publicly available materials. Projects that incorporate a regional or multi-country focus are encouraged.

4. Project Requirements

The end product of the research should be a paper, in English, saved as (or converted to) a Microsoft Word file. The length should be sufficient to give meaningful, practical guidance to practitioners in a way that is concise yet complete. This typically means a paper of 20-50 pages. Those page counts should be regarded as rough guidelines only.

Where actuarial/statistical methods are used, they should have sound foundations, rooted in established principles. With that understood, the techniques within a method should be intelligible to an actuary working general insurance. Moreover, a method’s output should be explainable to insurance industry decision makers who may not have the experience or education of an actuary.

We understand that this brief may rely on technologies which are generally understood within IT and engineering circles. Authors should understand that although actuaries are technically literate, they are not necessarily fluent in all the technologies that a paper might present, and therefore any technologies discussed should be introduced in the paper.

5. Proposal Requirements

A complete proposal will include the following items:

• The name and contact information of the lead researcher/primary contact for the project;
• The detailed hypothesis to be addressed in the research paper and why it is significant for actuarial professionals in Asia and how it will expand current knowledge on the topic. Please also describe how this work is new and not duplicative of existing material;
• An outline of the approach to be used (examples: literature reviews, models, etc.). Details should be given regarding the techniques to be used, material to be consulted, and possible limitations of the analysis;
• Resumes of the researcher(s) indicating how their education, skills, and experience are related to their qualifications to undertake the research;
• A project timeline with key milestones that also includes submission of a draft report to the CAS for questions and comments to be considered and addressed in the preparation of the final product. Please plan for up to eight weeks to receive feedback on your draft report from the CAS in your timeline.
• A detailed budget of no more than $40,000 USD that includes estimated numbers of hours per research team member and their associated hourly rates and any other direct or indirect costs (technology, materials, etc.). The budget should be reasonable in relation to the design of the research project.

6. Timeline and selection

The selection of a proposal is conditioned upon and not considered final until a Letter of Agreement is executed by both the CAS and the researcher.

The CAS will award to the respondent who - in the judgment of the CAS and entirely based on their written proposal - is best able to perform the work as specified herein. The CAS reserves the right to not award a contract for this research. Reasons for not awarding a contract could include, but are not limited to, a lack of acceptable proposals or a finding that insufficient funds are available. The CAS also reserves the right to redirect the project as is deemed advisable.

7. General Conditions

As a condition of selection, the CAS requires that all rights, title, and interest, including copyright and patent, in and to the report be owned by the CAS. The selected researcher/research team must sign a formal research agreement that assigns all such rights to the CAS. In any publication of the report, the researcher(s) will receive appropriate credit with regard to authorship.

The CAS may publish the report in its entirety, or any sections thereof, in any format and medium as it finds fit, including but not limited to CAS publications, and electronic versions such as on its website or physical storage media.

The CAS may choose to seek public exposure or media attention for the research. By submitting a proposal, you agree to cooperate with the CAS in publicizing or promoting the research and responding to media requests. The researcher(s) should make every effort to be available to present the report at CAS meetings or seminars (up to one in person in the U.S., two regionally in person in Asia, and two virtual).

Any accompanying code examples will be shared on the CAS GitHub site (https://github.com/casact). All material on GitHub is released under the Mozilla Public License, version 2.0 (https://www.mozilla.org/en-US/MPL/2.0/).

8. Contact Information

Interested researchers should submit their proposals and any questions to:
Brian A. Fannin, Research Actuary
Casualty Actuarial Society
bfannin@casact.org

and

Ran Guo, Country Director China & Staff Actuary
Casualty Actuarial Society
rguo@casact.org

The CAS Reinsurance Research Working Group is issuing a Request for Proposals (RFP) to develop methods for validating casualty catastrophe models.

1. Casualty Actuarial Society (CAS)

The CAS was organized in 1914 as a professional society for the promotion of actuarial and statistical science as applied to insurance other than life insurance, such as automobile, liability other than automobile, workers compensation, fire, homeowners, commercial multiple peril, and others. Such promotion is accomplished by communication with those affected by insurance, presentation and discussion of papers, attendance at seminars and workshops, collection of a library, research, and other means. The membership of the CAS includes over 9,000 actuaries worldwide, employed by insurance companies, industry advisory organizations, national brokers, accounting firms, educational institutions, state insurance departments, the federal government, and independent consultants.

2. Reinsurance Research Working Group

The Reinsurance Research Working Group addresses actuarial issues related to property and casualty ceded and assumed reinsurance. The group's charge includes furthering the development and dissemination of actuarial practice, theory, and principles of reinsurance; identifying topics for research and discussion; monitoring professional developments and regulatory activities; establishing liaisons with other organizations working in this area; and sponsoring panels, seminars, and other public forums on reinsurance issues.

3. Research Problem Description

Natural catastrophes like hurricanes and earthquakes which affect 1st party coverages are a well-studied problem in the actuarial literature. These events have several key characteristics: 1) they are rare, 2) they give rise to many claims, which – in the aggregate – threaten insurer solvency and the stability of markets and 3) specialized models are used for pricing. These models incorporate expertise in construction, engineering, seismology, meteorology, paleoclimatology, and other non-actuarial fields.

Casualty Catastrophe Model Evaluation and Integration

Actuaries in the field of excess and reinsurance pricing frequently deal with 3rd party risks with similar characteristics. Such events need not – and often are not – otherwise tied to a property catastrophe. These "casualty catastrophes” may involve dozens and potentially millions of injured parties. Total insurable losses reach into the millions to billions.

In the current insurance environment, the most common cause of such claims is product liability. Tobacco, talcum powder, opioid medications, and airbags have all received verdicts or settlements of $1 billion or more. Beyond product liability, casualty catastrophes can occur in other lines such as construction defect and homeowners liability.
Because of their rarity and scale, traditional actuarial methods are ill suited to estimate the pricing impacts of casualty catastrophes. Some firms offer casualty catastrophe modeling tools that purport to estimate exposures to casualty catastrophes, but practices and methods are evolving.

The group is, therefore, seeking to broaden the available material on the topic of casualty catastrophe evaluation and best practices or methods for integrating their outputs into reinsurance pricing.

4. Proposal Requirements

We are seeking researchers to develop methods and tools which address the shortcomings listed above for the excess and reinsurance lines of commercial auto liability, general liability, and professional liability as regards the topic of casualty catastrophe model evaluation or the excess and reinsurance lines of commercial auto liability, general liability, professional liability, and property as regards trend evaluation. An ideal submission would address one of the above topics (casualty catastrophe models or trend) with both technical recommendations on evaluating industry benchmarks as well as methods for integration into pricing.

Methods should have sound mathematical foundations, rooted in established principles of mathematical statistics or predictive modeling. With that understood, the techniques within a method should be intelligible to an actuary working in excess insurance pricing and should not pre-suppose extensive familiarity advanced topics in those fields. Moreover, methods and processes should be explainable to insurance industry decision makers who may not have the experience or education of the actuary implementing the testing or integration of industry benchmarks.

Proposals should include a clear outline of the work that will be performed and the time frame in which it will be performed (including key dates). The proposal should be accompanied by the resumes of the researcher(s), indicating how their background, education, and experience bear on their qualifications to undertake the research.

The CAS contract will be awarded to the respondent who - in the judgment of the Reinsurance Research Working Group and entirely based on their written proposal - is best able to perform the work as specified herein. If the group determines that no proposal meets the requirements of the RFP, then no contract will be awarded.

Receipt of proposals will be acknowledged in a timely manner. Respondents who are not awarded the contract will be so informed shortly thereafter.
Interested researchers should submit their proposals and any questions to:

Brian A. Fannin, Research Actuary
Casualty Actuarial Society
bfannin@casact.org
(919) 457-3439

5. Timeline

Interested parties are welcome to submit questions about the RFP. All questions and responses will be circulated to those respondents who have submitted questions, or who have expressed their intent to submit by May 5, 2023.

6. Compensation

Compensation to researchers will be commensurate with the time required to carry out the work. Respondents should include an estimate of cost in their proposals. Total cost should not exceed $45,000.

7. Presentation, Ownership and Publication of Report

As a condition of selection, the CAS requires that all right, title, and interest, including copyright and patent, in and to the report be owned by the CAS. The selected researcher/research team must sign a formal research agreement that assigns all such rights to the CAS. In any publication of the report, the researcher(s) will receive appropriate credit with regard to authorship. The CAS may publish the report in its entirety, or any sections thereof, in any format and medium as it finds fit, including but not limited to CAS publications, and electronic versions such as on its Web site or physical storage media.

The researcher(s) should make every effort to be available to present the report at a CAS meeting or seminar.

The CAS Research Council is issuing a Request for Proposals (RFP) to gauge the impact of climate change on the insurance industry by product line.

Casualty Actuarial Society (CAS)

The CAS was organized in 1914 as a professional society for the promotion of actuarial and statistical science as applied to insurance other than life insurance, such as automobile, liability other than automobile, workers compensation, fire, homeowners, commercial multiple peril, and others. Such promotion is accomplished by communication with those affected by insurance, presentation and discussion of papers, attendance at seminars and workshops, collection of a library, research, and other means. The membership of the CAS includes over 8,600 actuaries worldwide, employed by insurance companies, industry advisory organizations, national brokers, accounting firms, educational institutions, state insurance departments, the federal government, and independent consultants.

The CAS Research Council

The CAS Research Council was formed in 2021 to prioritize the research needs of the general insurance actuarial community. This work will augment the existing work of standing research working groups which focus on specific practice areas like ratemaking, reserving, reinsurance, and risk analysis. The operational oversight of projects will be designated to a project oversight group (POG) made up of CAS staff and volunteers.

Research Problem Description

The necessity of considering climate change in financial risk management is well-established. Although mainstream coverage tends to focus on hurricane and other natural catastrophes, research has also explored the impact on other coverage lines like crop insurance and mortality. It is easy to envision how climate change may affect many other coverages as well, from the assignment of liability for human activity which affects the climate, to comorbidities which impact workers compensation claim value, to professional liability when engineers and architects are unable to foresee all of the complications associated with a changing physical landscape, and challenged infrastructure. Not all effects will increase the cost of risk. Longer and milder winters, in more northerly latitudes will reduce the harms associated with ice, or the weight of snow.

The CAS wants a document which will look ahead to a future which has been impacted by climate change. We want to understand how things will play out for the major coverage lines, so that industry professionals – actuaries, claims, underwriters, and risk managers – may begin to prepare. Authors should develop plausible, scientifically grounded scenarios and describe how they will impact insurance coverages. Where future events lead to new product offerings, or the elimination of existing products, that information will be quite relevant. Insofar as quantitative forecasts are possible, that sort of detail will strengthen the paper.

When thinking about coverage lines, an obvious point of reference would be the Schedule P lines of business as defined by the NAIC annual statement. Authors should strongly consider aligning their work with this structure as it presents a ready comparison to existing public data. That understood, any proposed breakdown which is comprehensive, yet intelligible will be given consideration.

Project Requirements

The end product of the research should be a paper, saved as (or converted to) a Microsoft Word file. The length should be sufficient to give meaningful, practical guidance to practitioners in a way that is concise yet complete. This typically means a paper of 15-50 pages. Those page counts should be regarded as rough guidelines only.

Where actuarial/statistical methods are used, they should have sound foundations, rooted in established principles. With that understood, the techniques within a method should be intelligible to an actuary working in reserving. Moreover, a method’s output should be explainable to insurance industry decision makers who may not have the experience or education of an actuary.

Any accompanying code examples will be shared on the CAS GitHub site (https://github.com/casact). All material on GitHub is released under the Mozilla Public License, version 2.0 (https://www.mozilla.org/en-US/MPL/2.0/).

Proposal Requirements

Proposals should include a clear outline of the work that will be performed and the time frame in which it will be performed (including key dates). The proposal should be accompanied by the resumes of the researcher(s), indicating how their background, education, and experience bear on their qualifications to undertake the research.

The CAS contract will be awarded to the respondent who - in the judgment of the Reinsurance Research Committee and entirely based on their written proposal - is best able to perform the work as specified herein. If the committee determines that no proposal meets the requirements of the RFP, then no contract will be awarded.

Receipt of proposals will be acknowledged in a timely manner. Respondents who are not awarded the contract will be informed shortly thereafter.

Interested researchers should submit their proposals and any questions to:
Brian A. Fannin, Research Actuary
Casualty Actuarial Society
bfannin@casact.org
(919) 457-3439

Timeline

Interested parties are welcome to submit questions about the RFP. All questions and responses will be circulated to all who submit a proposal.

Compensation

Compensation to researchers will be commensurate with the time required to carry out the work. Respondents should include an estimate of cost in their proposals. Total cost is not expected to exceed $30,000. Where a proposal exceeds this amount, sufficient justification should be provided by the respondent.

Presentation, Ownership and Publication of Report

As a condition of selection, the CAS requires that all rights, title, and interest, including copyright and patent, in and to the report be owned by the CAS. The selected researcher/research team must sign a formal research agreement that assigns all such rights to the CAS. In any publication of the report, the researcher(s) will receive appropriate credit with regard to authorship. The CAS may publish the report in its entirety, or any sections thereof, in any format and medium as it finds fit, including but not limited to CAS publications, and electronic versions such as on its Web site or physical storage media.

The researcher(s) should make every effort to be available to present the report at a CAS meeting or seminar.

Bibliography

Pan, Qimeng. 2021. "Assessing the effectiveness of the actuaries climate index for estimating the impact of extreme weather for crop yield and insurance applications." Master's Thesis. January.

The Economist. 2019. "Changing weather could put insurance firms out of business." November 19.

The Economist. 2019. "Changing weather could put insurance firms out of business." November 19.

Pan, Qimeng. 2021. "Assessing the effectiveness of the actuaries climate index for estimating the impact of extreme weather for crop yield and insurance applications." Master's Thesis. January.

Miljkovic, T., Miljkovic, D. & Maurer, K. “Examining the impact on mortality arising from climate change: important findings for the insurance industry.” Eur. Actuar. J. 8, 363–381 (2018).

The CAS Research Council is issuing a Request for Proposals (RFP) to assess how cyber insurers should price the prospective coverage given the limited history and recent trend of increasing loss costs.

Casualty Actuarial Society (CAS)

The CAS was organized in 1914 as a professional society for the promotion of actuarial and statistical science as applied to insurance other than life insurance, such as automobile, liability other than automobile, workers compensation, fire, homeowners, commercial multiple peril, and others. Such promotion is accomplished by communication with those affected by insurance, presentation and discussion of papers, attendance at seminars and workshops, collection of a library, research, and other means. The membership of the CAS includes over 8,600 actuaries worldwide, employed by insurance companies, industry advisory organizations, national brokers, accounting firms, educational institutions, state insurance departments, the federal government, and independent consultants.

The CAS Research Council

The CAS Research Council was formed in 2021 to prioritize the research needs of the general insurance actuarial community. This work will augment the existing work of standing research working groups which focus on specific practice areas like ratemaking, reserving, reinsurance, and risk analysis. The operational oversight of projects will be designated to a project oversight group (POG) made up of CAS staff and volunteers.

Research Problem Description

The economic consequences of a cyber-attack are well known. Organizations may lose access to critical systems and data, they may have valuable intellectual property compromised, physical systems which rely on software for control may be rendered useless – or worse – may be misused to damage property. Moreover, cyber risk has a larger risk of contagion than many other risks. Successful attack strategies may be repeated. Organizations themselves may contribute to the spread of malware by infecting the systems of suppliers, employees, business partners and customers. Finally, the available data reflect a limited time horizon, during which exposures and the means by which vulnerabilities may be attacked are both changing rapidly.

Two years ago, the CAS published a research paper which explored the merits and considerations of various exposure bases for cyber insurance pricing. We are looking to build on that work to give practicing actuaries and risk managers clear and useful guidance on how to take exposure data and develop a sensible risk transfer price. The ideal research paper will have illustrative data and examples, which one may readily explore.

Project Requirements

The end product of the research should be a paper, saved as (or converted to) a Microsoft Word file. The length should be sufficient to give meaningful, practical guidance to practitioners in a way that is concise yet complete. This typically means a paper of 15-50 pages. Those page counts should be regarded as rough guidelines only.
Where actuarial/statistical methods are used, they should have sound foundations, rooted in established principles. With that understood, the techniques within a method should be intelligible to an actuary working in reserving. Moreover, a method’s output should be explainable to insurance industry decision makers who may not have the experience or education of an actuary.

Any accompanying code examples will be shared on the CAS GitHub site. All material on GitHub is released under the Mozilla Public License, version 2.0.

Proposal Requirements

Proposals should include a clear outline of the work that will be performed and the time frame in which it will be performed (including key dates). The proposal should be accompanied by the resumes of the researcher(s), indicating how their background, education, and experience bear on their qualifications to undertake the research.

The CAS contract will be awarded to the respondent who - in the judgment of the Reinsurance Research Committee and entirely based on their written proposal - is best able to perform the work as specified herein. If the committee determines that no proposal meets the requirements of the RFP, then no contract will be awarded.

Receipt of proposals will be acknowledged in a timely manner. Respondents who are not awarded the contract will be informed shortly thereafter.

Interested researchers should submit their proposals and any questions to:

Brian A. Fannin, Research Actuary
Casualty Actuarial Society
bfannin@casact.org
(919) 457-3439

Timeline

Interested parties are welcome to submit questions about the RFP. All questions and responses will be circulated to all who submit a proposal.

Compensation

Compensation to researchers will be commensurate with the time required to carry out the work. Respondents should include an estimate of cost in their proposals. Total cost is not expected to exceed $30,000. Where a proposal exceeds this amount, sufficient justification should be provided by the respondent.

Presentation, Ownership and Publication of Report

As a condition of selection, the CAS requires that all rights, title, and interest, including copyright and patent, in and to the report be owned by the CAS. The selected researcher/research team must sign a formal research agreement that assigns all such rights to the CAS. In any publication of the report, the researcher(s) will receive appropriate credit with regard to authorship. The CAS may publish the report in its entirety, or any sections thereof, in any format and medium as it finds fit, including but not limited to CAS publications, and electronic versions such as on its Web site or physical storage media.

The researcher(s) should make every effort to be available to present the report at a CAS meeting or seminar.